Pulse of the Market: February 29, 1010

Every weekend on Financial Tides I try to cut through all the headlines and sound bites that just confuse the heck out of me to step back and figure out what really happened in the past week and decide what to do in the next week. As always I get my data from Barchart. I use the same 3 benchmarks so I don't confuse myself.

Value Line Index -- I use this because it contains 1700 stocks making it broader than the S&P 500 or the even narrower Dow 30 - Down .4% for the week but still up 4.65% for the month.

• The Index closed on Friday above all 3 daily moving averages -- 20, 50 & 100 DMA


• Barchart's 13 technical indicators had 8 buys, 3 holds and 2 sells for a 48% overall buy rating

Barchart market momentum -- The percentage of stocks trading above their DMAs for various periods -- If the figure is above 50% then you have better than 1/2 a chance to make some money -- all 3 slightly down but still in your favor

• 20 DMA -- 73.25% closed above the 20 DMA -- down from 74.89% last week


• 50 DMA -- 58.95% closed above the 50 DMA -- down from 61.39% last week


• 100 DMA -- 66.14% closed above the 100 DMA -- down from 67.38% last week

Ratio of stocks hitting new highs to new lows for various time frames -- 1.0+ bullish, 1.0 neutral, below .99 bearish -- looks like we are still OK this week

• 20 day ratio of new highs to new lows -- 1171/271 = 4.32


• 50 day ratio of new highs to new lows -- 486/138 = 3.52


• 100 day ratio of new highs to new lows -- 406/102 = 3.98

Summary -- We were just slightly off the momentum we had last week but not really negative. Might be a good week to cull what hasn't performed and search of some new replacements next week.

Wall Street Survivor results -- Well for the month the S&P 500 was up 2.85% and 5 of our Top Stock contestants beat that mark. Anthony Mirhaydari lead the pack with a 10.57% MTD return and I managed to follow closely with a 10.05% increase. On Friday I sold Tyler Technologies (TYL) because it just wasn't maintaining a price above its 50 day moving average. I'll hunt for a replacement later next week.

We've turned another page on the calender so let's see who the new leader will be next month.

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

Disclosure - No positions in any stock mentioned.

Other articles by this author:

GA GA over Google

Look in the Fridge for your next investment

Ga-Ga over Google

I was stuck this morning at the car dealership while they were working on my car but at least I got to read the Financial Times from cover to cover. I like to know what they are thinking on the other side of the pond. I found no less than 13 different articles or editorials about Google (GOOG) and how everyone in Europe thinks that the only way Google could be so successful is that they aren't playing fair.

If there is a person on the planet that doesn't know about Google it's best explained in an old press release: "Google is a public and profitable company focused on search services. Named for the mathematical term `googol`, Google operates web sites at many international domains, with the most trafficked being www.google.com. Google is widely recognized as the `World's Best Search Engine` and is fast, accurate and easy to use. The company also serves corporate clients, including advertisers, content publishers and site managers with cost-effective advertising and a wide range of revenue generating search services. Google's breakthrough technology and continued innovation serve the company's mission of `organizing the world's information and making it universally accessible and useful." Some where I also heard the mission was "Do no evil". Tell that to the EU.

What has all Europe in a tizzy is that most of their search engine business models worked under a premise that is you offered local content in the local language and concentrated on local web sites you'd have the market share of the local market. Boy were they off base. In almost every single country Google has the majority of the market share and is growing its market share at the expense of the in country search engines.

Now I realize that Google is not the type of company I normally look at on Financial Tides. It's not a recent momentum stock pick in any ones' book. Recently Barchart's 13 technical indicators have 11 of 13 sell signals for an overall 80% sell recommendation. The stock is still off it's 11/2007 high of 747.24 by 30.25%. So why am I even looking?

There seems to be some opposite views about behemoth companies like Google:

1. It's too big to fail
2. It's too big to have significant growth

I think both views are wrong. The management at Google realizes that there are a lot of smart people out there that want to shoot them down so they continue to improve the product and come up with new ways to stay ahead of the competition. Kind of sounds like what Microsoft has been doing for years. They continue to do what is important to you and I by finding new ways to monetize the product. Google, after it conquers the world might become the biggest cash cow ever.

What do the analysts say? There are 38 analysts following the company and 33 of them have buy or better recommendations outstanding, They look for a 15.4% increase in next years revenue and a 14.7% increase in earnings per share. They expect the 5 year compounded EPS growth to be 21.31%. Those don't seem like projections for one of the largest companies on the planet, those are numbers you'd expect to see in a small cap growth recommendation.

Just how popular is the company with investors? The Motley Fool CAPS members think the stock will out perform the market by a vote of 12695 to 2523 with the All Stars agreeing 2605 to 352. The Wall Street columnists Fool follows give GOOG a thumbs up 43 to 0.

Just how popular is the company world wide? Well I Googled the most visible person I could think of and Obama can up with 16.1 million references. That's pretty big! When I Goggled Google the count was 156 Million; almost 10 times the number of hits for the most powerful person on the planet.

Google can't be ignored. Why should you invest:

• It's one of the most noticeable companies on the globe but still has projected growth rates of a small cap growth stock
• If other search engines are calling foul and talking smack about you, you must be doing something right
• The world seems to be its oyster and as computer use grows in developing and third work countries every new computer user is a potential customer.
• Google is more popular that Obama -- even among democrats and socialists

You have to decide if the stock is right for you but you can't ignore it as a possibility. After they conquer the world and fully monetize the product dividends should being flowing.

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

Disclosure: No positions in GOOG at the time of publication

Other articles by this author:

• Look in the Fridge for your next investment
• 5 reasons to buy Tyson Foods TSN

Look in the Fridge for an investment

Last week I sold ScanSource (SCSC) and needed a replacement. When I'm on the hunt I first go to Barchart and screen for the stocks having the most frequent price appreciations in the last 20 sessions; take the top 10 and then do some additional screening to see what should be eliminated. The stock I had left was Church & Dwight Company Inc (CHD). The name didn't ring a bell with me and I was surprised to find that was the name of holding company that owns Arm & Hammer; products I've been using for years.

First let's see why it came up on my list. The stock had a price appreciation in 14 of the last 20 trading sessions and was 5 for 5 recently. It has enjoyed a 7.97% price increase in the last month. On Barchart's 13 technical indicators the stock has a buy signal on 12 of the 13 indicators. This stock has the positive and consistent price momentum I like.

On the fundamental side analysts have 5 buy, 9 hold and only 1 under perform recommendation outstanding and 10 of them have increased their EPS estimates for the future in the last 30 days alone. They expect a 4.1% increase in revenue coupled with a 11.3% increase in earnings per share for the coming year. A 5 year compounded EPS growth rate of 12% is projected.

The stock enjoys growing investor sentiment. Some of that might have been triggered by a recent article on The Street.com naming CHD as one of the top 5 Mid Cap Stocks. On Motley Fool CAPS members have noticed and voted that the stock will out perform the market by a vote of 303 to 15 and the All Stars agree 111 to 6. The Wall Street columnists Fool follows like the stock 8 to 0.

The reasons I like CHD:

• Recent price appreciation in more than 50% of the last 20 trading sessions
• Good analysts recommendations with positive revenue and earnings projected in the future
• A solid brand recognition on the products it owns
• Positive recent press on The Street.com
• Great investor sentiment as evidenced by the positive votes from Motley Fool members.

I'm adding 150 shares of Church & Dwight (CHD) to my Wall Street Survivor portfolio to replace ScanSource (SCSC) which I sold last week when it failed to maintain a price above its 50 day moving average.

Jim Van Meertren is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com

Disclosure: No positions in the stocks mentioned at the time of publication

Axis is not evil for your portfolio

Today's stock pick was found like I always do by using Barchart to screen for the stocks having the most consistent price appreciation recently. Today's stock Axis Capital Holdings (AXS) is just such a stock. It has had price appreciation in 12 of the last 20 sessions and is 5 for 5 recently. In the last month it has enjoyed a 10.71 increase in price and has an 80% Barchart buy receiving a buy signal on 11 of Barchart's 13 technical indicators.

Axis has usually got a bad connotation like in the Axis Powers in WW2 or the Axis of Evil but don't be scared off by the name. This Axis is a Bermuda-based global provider of specialty lines insurance and treaty reinsurance. They offer both insurance and reinsurance for all kinds of property and causality risk as well as a little bit of health insurance. What caught my eye was that they also insure for terrorism and political risks. Many of the companies that would like to invest in politically unstable areas of the globe will be their best customers.

Part of the recent price increase has been that they recently beat the Zack's earnings consensus of 1.31 by turning in an EPS of 1.83. Nice earnings surprise to the upside. Sales are expected to increase by 2.6% but in the last 30 days 3 analysts have upped their new EPS projections. They expect a 5 year compounded EPS growth of 17.1%. That would be nice for my portfolio.

Those same analysts give the stock 7 buy recommendations followed by 4 holds with no under perform or sell ratings.

To gauge investor sentiment I went over to Motley Fool where the CAPS members feel the stock will out perform the market by a vote of 113 to 8 with the All Stars in agreement 50 to 4. The Wall Street columnists Fool follows also agree 9 to 0.

What's to like:

• Positive price momentum in better than 50% of the recent trading sessions
• Fundamental analysts have increasing sale and earnings projections
• Investor sentiment is very high.

The stock is presently selling for around 31.50 and a stop loss is recommended at the 50 day moving average of 29.

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

Disclosure: no positions at the time of publication

I can't get enough memory

One of the hottest stock this week is Intergrated Silicon Solutions (ISSI). The company designs, develops and markets high performance memory devices including static random access memory, low and medium density dynamic random access memory, and nonvolatile memory, as well as voice recording devices and certain microcontrollers and embedded memories. Their memory devices are used in networking applications, telecommunications, data communications, disk drives and other peripherals, personal computers, office automation, instrumentation and consumer products. Can you have too much memory.

I was screening on Barchart for stocks have the most frequent price increases in the last 20 sessions and ISSI had 15 in the last 20 sessions plus 5 in the last 5. The price appreciation has been 82.58% for the period. Barchart's technical indicators signal 12 of 13 buy for a 96% buy rating.

Analysts also have a buy recommendation on the stock with an estimate for next year of a 14.5% increase in revenue and 29.4% for earning per share. Even better a 10% compounded 5 year EPS is expected.

Over on Motley Fool the CAPS members think the stock will out perform the market by a vote of 76 to 14 with the All Stars in agreement 15 to 1.

This is a stock you might want to get below 9 with a stop loss of no less than 8.

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

Disclosure: No positions at the time of publication

Is someone buying donuts this morning?

I'm from the south and one of the first things I experienced my freshman year is college was a breakfast of Krispy Kreme (KKD), the breakfast of champions. Once you've had one coming right off the line you're hooked. This is the donut with a cult following and just won't go away. A few years ago, KKD was the darling of the investment community with major plans to take their gourmet vices into China. They were opening stores left and right but seemed to just get too big for their britches -- along with the rest of us that were goggling up those treats.

Lately the stock has just languished and not done very much. In the past month something has been happening. All of a sudden KKD came up on my Barchart screener for stocks having the most frequent price appreciations. The price has been moving up and the stock had price appreciation in 7 of the last 20 trading sessions and 4 of the last 5. In the last 20 sessions there has been a 15.38% price increase. The stock is enjoying very positive ratings on Barchart's short term technical indicators.

Analysts are not real high on the stock but do predict a 20.5% increase in earning per share this year and a 15% EPS 5 year growth rate.

Why the priced movement? There are some rumors that Wendy's or some other chain may either buy the company outright or begin offering their donuts as a breakfast item. KKD has been known to sell smaller versions of their donut frying machines that can be used as an alternate to owning a whole store.

This is a stock to watch and maybe place a stop on the 20 day moving average in case the rumor is full of holes.

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

Disclosure: no positions at the time of publication

11 stocks to watch: February 22, 2010

Each weekend I use Barchart to screen for a list of stocks that I think may be of interest to my readers in the coming week. I am not recommending these stocks, I just want to share with you a screening process and it's up to you to do further research and see if there is a place in your portfolio for these issues.

I start with the list of stocks hitting new highs and lows for the last 20 days and sort for frequency. I then take the top 10 from each list that have hit new milestones in at least 50% of the last 20 sessions. That list of the 10 top gainers and 10 top losers is where I start.

I put them all in a test portfolio and then start eliminating stocks. First I cull any that do not score as 80% short term buy or sell signal on Barchart short term technical indicators. Next I cull any that do not have a positive or negative price change for the last 5 days. That list leaves me with just 11 issues out of the original 20. I list the information from Barchart and Yahoo Finance that is available to all of you.

Long Positions:

PTIE -- Pain Therapeutics is developing a new generation of opioid painkillers.Opioids are drugs derived from the poppy plant. The company uses technology to reformulate opioid drugs, such as morphine, into new painkillers with improved clinical benefits. The company has four opioid painkillers in Phase II clinical trials. The company believes its drugs offer enhanced pain relief, fewer adverse side effects and reduced tolerance and addiction compared to existing opioid painkillers.

The issue has hit new highs on 17 of the last 20 sessions with a 19.11% price appreciation in the last month. Analysts think the stock will increase sales 137.1% next year and have a 5 year compounded EPS growth rate of 83.0%

MEND -- Micrus Endovascular Corporation is a medical device company that develops, manufactures and markets implantable and disposable medical devices used in the treatment of cerebral vascular diseases.

Increases in price in 17 of 20 sessions plus an increase in price of 33.66%.

ISSI -Integrated Silicon Solutions designs, develops and markets high performance memory devices including static random access memory, low and medium density dynamic random access memory, and nonvolatile memory, as well as voice recording devices and certain microcontrollers and embedded memories. Their memory devices are used in networking applications, telecommunications, data communications, disk drives and other peripherals, personal computers, office automation, instrumentation and consumer products.

The stock has had a price appreciation on 14 of the last 20 sessions and a 46.11% price increase of the month. Analysts look for sales to grow 14.5% and EPS by 29.4% nest year with a 10% 5 year compounded EPS growth for the next 5 years

ZARLF -- Zarlink Semiconductor delivers wired, wireless and optical connectivity solutions that bring together networks and people, and it provides highly specialized ultra low-power chipsets for use in medical applications. Zarlink customers include Samsung, Motorola, Alcatel, Mitsubishi, Cisco, Sony, Nortel, Lucent, Siemens, Ericsson and Fujitsu.

Price appreciation in 14 of the last 20 session with a price appreciation of 54.45%. Analysts look for sales increase of 9.8% plus EPS growth of 1500% (off a loss) and a 5 years EPS growth of 12.5%.

SLE -- Sara Lee Corporation is a global manufacturer and marketer of high-quality, brand-name products for consumers throughout the world. The company's mission is to continue to build leadership brands in consumer packaged goods categories. The company has three global businesses: Food and Beverage, Intimates and Underwear, and Household Products through which it manufactures and markets products of exceptional quality and value under leading, well-known brand names such as Sara Lee, Earth Grains, Jimmy Dean, Douwe Egberts, Chock full o' Nuts, Hanes and Playtex.

13 price increase in the last 29 sessions with a 14.79% price increase. Analysts estimate an increase in sales of 4.0% with EPS growth of 8.9% next year plus EPS growth of 8.77% for the next 5 years.

PRGO -- Perrigo Company, is the nations largest manufacturer of store brand over-the-counter (non-prescription) pharmaceutical products and also manufactures store brand nutritional products. Store brand products are sold by national and regional supermarket, drugstore and mass merchandise chains under their own labels and compete with nationally advertised brands. The Company's products include analgesics, cough and cold remedies, antacids, laxatives, feminine hygiene and smoking cessation products, and vitamins, nutritional supplements and nutritional drinks.

Price appreciation in 13 of 20 sessions and a price increase of 16.73% for that period. Analysts estimates of sales up 7.9%, EPS up 9.2% and 5 year EPS growth of 17.45%

LANC -- Lancaster Colony Corp. manufactures and markets three families of products: Glassware and Candles; Specialty Foods; and Automotive. Consumer glassware includes a diverse line of decorative and ornamental products such as tumblers, bowls, pitchers, jars and barware. The food products manufactured and sold include salad dressings and sauces; fruit glazes, veggie dips and fruit dips; frozen unbaked pies. It also manufactures and sells a complete line of rubber, vinyl and carpeted car mats both in the aftermarket and to original equipment manufacturers.

13 of the last 20 session have had price increases with a 14.58% price appreciation. Analysts think EPS will be up 43.33% this year and revenue up 4.1% next year.

Sell or Short positions -- If you own these consider selling; if you're experienced you might short these:

DTSI -- DTS, Inc. is a digital technology company dedicated to delivering the ultimate entertainment experience. DTS decoders are in virtually every major brand of 5.1-channel surround processors, and there are more than 300 million DTS-licensed consumer electronics products available worldwide. A pioneer in multi-channel audio, DTS technology is in home theatre, car audio, PC and game console products, as well as DVD-Video, Surround Music and DVD-ROM software.

Price decreases in 14 of the last 20 sessions for a loss of 12.41%.

PBIB -- PBI Bank, Inc. provide quality banking services, great rates and excellent customer service. We believe PBI Bank represents the future of banking and our growing customer base agrees. PBI Bank, Inc. is headquartered in Louisville, KY. They have many banking centers across Central Kentucky to serve our customers banking needs.

Price deceases in 13 of the last 20 sessions plus a 23.73 Loss in price

ELGX -- Endologix, Inc. develops, manufactures and markets products for the treatment of coronary and vascular diseases. A leader in the emerging field of vascular brachytherapy, Endologix, has developed a unique method for the delivery of radiation to prevent restenosis following the interventional treatment of atherosclerosis.

11 prices losses in 20 sessions for a 15.62% loss.

Bonus stock:

This is a stock you may eventually hate. It has no revenue and has a lost of competition and it's price action may for tell a pump and dump. This is a lotto ticket.

NGLF -- National Golf Emprioum -- 17 price increase in to session for a 200% price increase -- only for the most experienced speculators.

Don't buy or sell any of these without through research to see if the trades are right for you.

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

Disclosure: no positions in any of these stocks at the time of publication