Saturday, March 6, 2010

Market recovers nicely

As I do every weekend on Financial Tides, I use Barchart to filter out all the noise I've read all week long and step back for an objective, by the numbers view of what the market really did and how strong it reacted to all the hype from who knows where. Wouldn't life be simpler if all that counted was growth in GDP and individual companies' sales and earnings growth? I guess we'll all just have to adjust to the talking heads and the hot air out of Washington. Let's start as usual with the Value Line Index, then the Barchart market momentum and finally the ratio of stocks hitting new high to new lows.

Value Line Index -- I use this Index because it contains 1700 stocks making it much broader than the S&P 500 or much narrower Dow 30 -- The Index was up for the week by 5.18%
  • The Index plotted above its 20, 50 and 100 day moving averages -- positive trend
  • Barchart's technical indicators rate the Index an 88% buy with 12 of 13 indicators on buy signals

Barchart market momentum indicator -- usually contains around 6000 stocks --the percentage of stocks trading above their daily moving averages for various time frames -- also a nice upward trend

  • 20 DMA -- 88.28% traded above compared to 73.15% last week and 20.48% last month
  • 50 DMA -- 79.46% traded above compared to 58.91% last week and 36.99% last month
  • 100 DMA -- 79.44% traded above compared to 66.08% last week and 46.12% last month

Ratio of stocks hitting new highs to stocks hitting new lows for various time frames -- 1.0+ bullish, 1.0 neutral and below .99 bearish -- this week looked good

  • 20 day ratio of stocks hitting new highs to new lows -- 3059/196 = 15.61
  • 65 day ratio of stocks hitting new highs to new lows -- 1131/85 = 16.43
  • 100 day ratio of stocks hitting new highs to new lows -- 1121/542 = 2.07

Summary -- The market looked pretty strong for the week. I trimmed a lot of stocks from my various portfolios especially those that didn't respond to the change in the market; mostly those that didn't maintain a priced above their 50 day moving averages. Unless something drastic happens I'll replace those this week with confidence.

Wall Street Survivor results -- The S&P 500 has gone up 2.06% month to date and 6 of our 8 contestants beat that. Month to date Vad -- The Sceptical Capitalist gained 6.36% and I 'm in second with 4.67% gain. Ahh -- maybe next week.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email

Disclosure: I do not hold any positions in the stocks in my Wall Street Survivor portfolio.

Thursday, March 4, 2010

Is there money in security?

I had a little extra buying power in my Wall Street Survivor portfolio so I went on the hunt for a new stock to add to that portfolio. As always I start on Barchart and screen for the stocks that in the last 20 trading sessions had price appreciations on at least 50% of those days. After taking the top 10 and doing some additional filtering I came upon Kratos Defense and Security Solutions (KTOS).

Since 9/11 I've noticed a great change in the environment in the US. I have to go through check points and security screenings that I never thought would happen. Even when I go to athletic events at public middle schools and high schools, I must open up everything and be wanded with a metal detector. When I go to local city and school board meetings I have to sign in, produce an ID and be screened by a metal detector. As I walk the downtown streets of Charlotte now instead of counting the number of Volkswagen beetles I find myself looking up and seeing how many security cameras I can find. It's almost like the only thing that they got wrong in the book 1984 was the date.

I'm not trying to make you uncomfortable but I'm trying to show you that this is a company that seems to be positioned to come up with solutions to what has become an ever consuming concern -- security.

They have 2 major divisions. The largest Kratos Governmental Solutions provides weapons systems advice to the US government plus state and municipal governments. One of their largest customers is the Department of Defense and they also advice those little armies we never had -- police SWAT teams. The second major division, the Public Safety and Security Division advises retail, health care, educational and municipal governmental entities on all the types of security concerns they might have. Now that you know the stock's story how about the numbers?

Barchart's technical indicators give a buy signal on 12 of the 13 indicators of an overall 96% buy rating. The stock has appreciated in 16 of the last 20 sessions and is 5 for 5 recently. The last 30 days has seen a 28.41% price appreciation.

Brokerage analysts predict that although they might only grow revenue by about 4.5% next year they should have an increase in earnings per share of 127.4% due to coming off a loss this year. They are looking of a 42% 5 year compounded growth rate in EPS. Not too shabby, they follow that up with 2 buy recommendations.

I like to know what the investor sentiment is so I usually go over to Motley Fool CAPS to see how their members are voting. The CAPS members think the stock will our perform the market by a vote of 96 to 2 with the All Stars voting 31 to 1. The Wall Street columnist Fool follow have positive articles 2 to 0.

Since the stock has a compelling story, positive technical momentum and a positive investor sentiment I'm adding Kratos Defense and Security Solutions (KTOS) to my Wall Street Survivor portfolio with all the appropriate mental stop orders around the 50 day moving average.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email

Disclosure: I have no position in KTOS at the time of publication

Wednesday, March 3, 2010

5 stocks for Wednesday: March 3, 2010

On my blog Financial Tides I like to start out the day by screening on Barchart for some stocks I might consider buying that day. I look for stocks that have been having recent price appreciation, are projected to have increases in sales and earnings and have some positive investor sentiment. I then take that list and research further. I'll start sharing that list with you each morning.

Cooper Companies Inc (COO) -- through its principal subsidiaries, develops, manufactures and markets healthcare products. CooperVision markets a range of contact lenses to correct visual defects, specializing in toric lenses that correct astigmatism. The company also markets conventional toric and spherical lenses and lenses for patients with more complex vision disorders. CooperSurgical markets diagnostic products, surgical instruments and accessories to the women's healthcare market.

Price appreciation on 16 of 20 trading session, 5 for 5 recently with a 14.41% return for he month -- a 96% buy rating on Barchart's technical indicators.

Analysts look for a 4.9% sales increase with a 12.5% EPS growth -- 5 years compounded EPS growth of 14% and 5 buy recommendations

Investor sentiment on Motley Fool has the CAPS members voting to outperform the market 43 to 33, All Stars voting 12 to 17 and Wall Street columnists 4 to 3

Abiomed (ABMD) -- a developer, manufacturer and marketer of medical products designed to safely and effectively assist or replace the pumping function of the failing heart. The company currently manufactures and sells the BVS-5000, a temporary heart assist device, which is approved by the U.S. Food and Drug Administration for the temporary treatment of all patients with failing but potentially recoverable hearts. The company is also engaged in research and development relating to other devices to support the pumping function of the heart.

15 price increases in 20 sessions and 5 for 5 recently plus a 30.76% monthly return -- a Barchart technical indicator buy rating of 80%.

Analysts predict a 18.7% increase in sales coupled with a 32.4% EPS growth. 5 year compounded EPS growth of 22.3% expected. 2 analysts have issued buy recommendations,

Investor sentiment on Motley Fool has a CAPS vote to out perform the market of 62 to 33 with the All Stars in agreement 19 to 14. The Wall Street columnists are split 4 to 3

Compass Diversified Holdings (CODI) -- was formed to acquire and manage a group of middle market businesses that are headquartered in North America. CODI provides public investors with an opportunity to participate in the ownership and growth of companies which have historically been owned by private equity firms, wealthy individuals or families. CODI's disciplined approach to its target market provides opportunities to methodically purchase attractive businesses at values that are accretive to its shareholders. For sellers of businesses, CODI's unique structure allows CODI to acquire businesses efficiently with no financing contingencies and, following acquisition, to provide its companies with substantial access to growth capital.

15 increases in price in 20 sessions and 5 for 5 recently. The monthly return of 21.93% has brought it a Barchart technical indicator buy rating of 96%

Analysts think a 6.4% increase in sales will bring a 43.0% increase in EPS. They predict a 12.5% 5 year compounded growth rate in EPS . They have 4 buy recommendations out there.

Investor Sentiment on Motley Fool brings a vote of 209 to 5 from the CAPS members that the stock will outperform the market followed by an All Star vote of 84 to 1, The Wall Street columnist like it 5 to 0

Newstar Financial (NEWS) -- is a specialized commercial finance company focused on meeting the complex financing needs of companies and private investors in the middle markets. The Company specializes in providing senior secured debt financing for the acquisition or recapitalization of mid-sized companies and commercial real estate. NewStar originates loans directly through a team of experienced, senior bankers organized around key industry and market segments. The Company targets 'hold' positions of up to $20 million and selectively underwrites or arranges larger transactions for syndication to other lenders. NewStar is headquartered in Boston, MA and has regional offices in Darien, CT, Chicago, IL, San Diego, CA, and Charleston, SC.

The stock has enjoyed 15 days of increases in 20 sessions and is 5 for 5 recently. A monthly increase of 21.93% has brought a 96% Barchart technical buy rating.

Analysts have the sales increase predicted of 9.2% and a whopping 392.3% EPS improvement coming of a loss. Estimates of a 15% 5 year compounded growth of EPS is their estimate. The 2 buy recommendations are followed by a hold.

Motley Fool CAPS members vote to out perform the market 46 to 19 with the All Stars voting 23 to 4. The Wall Street columnists are 3 to 0

Actel Corp (ACTL) --designs, develops, and markets field programmable gate array and associated development system software and programming hardware. Their product line consist of ten families of antifuse-based FPGAs; Designer Series Development System, DeskTOP, and CoreHDL software; SiliconExplorer debugging and diagnostic tools; Activator and Silicon Sculptor device programmers; and sockets.

15 price increases in 20 sessions plus 4 for 5 recently. The monthly return of 25.45% brings it an 80% Barchart technical buy rating.

Analysts only have a 15% compounded 5 year EPS growth estimate with 1 buy recommendation posted.

Motley Fool CAPS members think the stock will outperform the market by a 35 to 13 vote with the All Stars at 9 to 5. Wall Street columnist have only 1 buy out there.

Well, that's the list for today. Start with these and go through whatever due diligence you fell comfortable using. Be careful.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email

Disclosure: no positions in any of the stocks mentioned.