Tag Archives: nyse

A Half-Dozen Charts Make Medical Equipment Group One To Watch

A number of stocks in the medical equipment industry group are tracing bullish patterns, making the group one to watch closely. The group itself has been a market leader, ranked in the top 30 of 197 IBD groups for several weeks. Investors will find in it an attractive mix of stocks in buy range or still forming bases. Cantel Medical ( CMN ) is forming a base-on-base pattern with a 72.79 buy point. Shares have behaved well, making relatively small price fluctuations each day as they form the base. That’s considered a strong foundation, and suggests that the stock won’t have problems forming the rest of the pattern. Despite softening earnings growth (up 17% to 42 cents a share in the latest quarter), the maker of equipment to prevent and control infections in hospitals and other medical facilities still has one of the highest EPS Ratings of 32 companies in the group. It gets a 95 EPS Rating out of a maximum 99 from IBD Stock Checkup . Intuitive Surgical ( ISRG ) is rising from a pullback to the 10-week moving average. That makes it the first follow-on buy area for the stock since it broke out of a base in March. (In a follow-on area, investors add a smaller number of shares than the number they acquired on a breakout.) With strong Relative Strength and Accumulation/Distribution Ratings, the stock has a better chance to keep rising. The main risk for Intuitive Surgical and any other stock is the market, which can quickly obliterate even the best charts. How do you quickly check Intuitive’s proprietary IBD rankings? Go to Stock Checkup. Cynosure ( CYNO ) also is finding support at the 10-week average, but the stock is barely rising from that level. The company’s noninvasive fat-reduction system is driving growth. Masimo ( MASI ) broke out of a saucer base May 5 and is still in buy range from the 46.10 buy point. The breakout was nearly flawless: Shares surged 8% in nearly five times average volume as the company’s earnings topped estimates. Although shares closed below the buy point on the day of the breakout, it didn’t stop Masimo from advancing. Masimo makes equipment to monitor body functions, and has developed technology that can test blood without having to draw it by needle. Idexx Laboratories ( IDXX ) is at new highs. A long-term chart shows the stock is in buy range from the 84.35 buy point of a base more than a year in length. Another entry could be identified at 78.59. The maker of veterinary diagnostic equipment went to new highs after it reported results April 29. Idexx raised its full-year sales and profit guidance, citing success with new products and its strategies. Idexx has a lower EPS Rating than many other companies in the group, yet the market has cheered its outlook. Nevro ( NVRO ) is one of the newest stocks in the group, having gone public in November 2014. Shares have made quite a climb from the IPO price of 18 a share, and now are near a potential buy point at 70, from a cup-with-handle base. As a startup, Nevro has not made a profit yet and analysts expect losses this year and next. Investors seem to be drawn to the company’s fast sales growth, including a 114% spike in 2015 sales to $70 million. Redwood City, Calif.-based Nevro specializes in spinal cord stimulation systems to treat pain.

Best And Worst Q2’16: Information Technology ETFs, Mutual Funds And Key Holdings

The Information Technology sector ranks fourth out of the ten sectors as detailed in our Q2’16 Sector Ratings for ETFs and Mutual Funds report. Last quarter , the Information Technology sector ranked third. It gets our Neutral rating, which is based on aggregation of ratings of 29 ETFs and 122 mutual funds in the Information Technology sector as of April 18, 2016. See a recap of our Q1’16 Sector Ratings here . Figures 1 and 2 show the five best and worst rated ETFs and mutual funds in the sector. Not all Information Technology sector ETFs and mutual funds are created the same. The number of holdings varies widely (from 25 to 384). This variation creates drastically different investment implications and, therefore, ratings. Investors seeking exposure to the Information Technology sector should buy one of the Attractive-or-better rated ETFs or mutual funds from Figures 1 and 2. Figure 1: ETFs with the Best & Worst Ratings – Top 5 Click to enlarge * Best ETFs exclude ETFs with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings Figure 2: Mutual Funds with the Best & Worst Ratings – Top 5 Click to enlarge * Best mutual funds exclude funds with TNAs less than $100 million for inadequate liquidity. Sources: New Constructs, LLC and company filings Five mutual funds are excluded from Figure 2 because their total net assets are below $100 million and do not meet our liquidity minimums. The Van Eck Market Vectors Semiconductor ETF (NYSEARCA: SMH ) is the top-rated Information Technology ETF and the Fidelity Select Communications Equipment Portfolio (MUTF: FSDCX ) is the top-rated Information Technology mutual fund. Both earn a Very Attractive rating. The First Trust Dow Jones Internet Index Fund (NYSEARCA: FDN ) is the worst rated Information Technology ETF and the Invesco Technology Sector Fund (MUTF: IFOAX ) is the worst rated Information Technology mutual fund. FDN earns a Dangerous rating and IFOAX earns a Very Dangerous rating. 506 stocks of the 3000+ we cover are classified as Information Technology stocks. Cisco Systems (NASDAQ: CSCO ) is one of our favorite stocks held by FSDCX and earns a Very Attractive rating. Over the past decade, Cisco has grown after-tax profits ( NOPAT ) by 7% compounded annually. Cisco has improved its return on invested capital ( ROIC ) from 14% in 2005 to a top-quintile 17% in 2015. The company has generated a cumulative $32 billion in free cash flow ( FCF ) over the past five fiscal years. However, in spite of the operational strength exhibited by Cisco, CSCO is undervalued and presents an excellent buying opportunity. At its current price of $28/share, Cisco has a price-to-economic book value ( PEBV ) ratio of 0.8. This ratio means that the market expects Cisco’s NOPAT to permanently decline by 20%. If Cisco can grow NOPAT by just 6% compounded annually for the next decade , the stock is worth $43/share today – a 54% upside. ServiceNow (NYSE: NOW ) remains one of our least favorite stocks held by IFOAX and earns a Dangerous rating. ServiceNow was placed in the Danger Zone in December 2015. Since going public in 2012, ServiceNow’s NOPAT has declined from -$29 million to -$154 million while its ROIC declined from -29% to -41% over the same time frame. The drastic decline in profits and profitability is in stark contrast to ServiceNow’s revenue growth, as the company adopted a “grow revenue at all costs strategy,” which clearly ignores profits. Making matters worse, when we placed NOW in the Danger Zone, its valuation implied significant profit growth and despite NOW falling 21% since the publish date of our report, those expectations remain unrealistically high. To justify its current price of $63/share, ServiceNow must grow immediately achieve 15% pre-tax margins (-15% in 2015) and grow revenue by 23% compounded annually for 13 years . In this scenario, 13 years from now, ServiceNow would be generating over $14 billion in revenue, slightly below Facebook’s (NASDAQ: FB ) 2015 revenue. It’s clear how the expectations embedded in NOW remain overly optimistic. Figures 3 and 4 show the rating landscape of all Information Technology ETFs and mutual funds. Figure 3: Separating the Best ETFs From the Worst ETFs Click to enlarge Sources: New Constructs, LLC and company filings Figure 4: Separating the Best Mutual Funds From the Worst Mutual Funds Click to enlarge Sources: New Constructs, LLC and company filings D isclosure: David Trainer and Kyle Guske II receive no compensation to write about any specific stock, sector or theme. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

The V20 Portfolio: Week #32

The V20 portfolio is an actively managed portfolio that seeks to achieve an annualized return of 20% over the long term. If you are a long-term investor, then this portfolio may be for you. You can read more about how the portfolio works and the associated risks here . Always do your own research before making an investment. Read the last update here . Note: Current allocation and planned transactions are only available to premium subscribers . Over the past week, the V20 Portfolio declined by 5.5% while the SPDR S&P 500 ETF (NYSEARCA: SPY ) dipped by 0.5%. Portfolio Update MagicJack (NASDAQ: CALL ) reported Q1 earnings. MagicJack continued to deliver stable results, generating $6.9 million of cash flow in Q1. Earnings were slightly boosted by the Broadsmart acquisition, whose results have been included since March 17 th. Financially speaking, there was nothing exciting going on with MagicJack. It continued to generate good cash flow and it remains exceptionally cheap today, currently trading at 8x P/E or 4x excluding cash on hand. While the management has not been good a steward of capital (the reason why we significantly trimmed the position in the first place), the discount is simply too large to ignore. There is also a lot going on at the strategic front. In addition to the partnership with Movistar, which hasn’t produced anything meaningful thus far, the company is also redomesticating to the U.S. Management believes that this move may unlock additional demand for the stock. Our helicopter company’s results were not great. Of course, that was expected given the fact that oil has plateaued a bit and industry capex has remained low. Operating loss for the oil and gas segment amounted to $5 million, a large drop from Q1 2015’s profit of $19 million. On the other hand, the air medical segment continued to be profitable as expected, generating $10.4 million of operating profit, up 7% quarter on quarter. Intelsat (NYSE: I ) bought back a significant amount of debt. Since April 28 th, Intelsat has repurchased $460 million of 2022 notes through both the open market as well as private transactions “at varying discounts to the par amount”. While the effective price was not announced, it was clear that the discount was significant, as the bonds were trading below $70. The company also plans to buy back another $625 million of debt across various maturities ranging from 2021 to 2023 through a tender offer, also at significant discounts to par (~$75). While the funds used were the 8% 2024 notes (i.e. the company refinanced existing debt at a higher interest rate), the net impact was still positive given the massive discount. Looking Forward Conn’s (NASDAQ: CONN ) will report Q1 earnings in a couple of weeks. As the company continues to tweak the credit policy, sales growth may tumble, as we’ve seen in April (policy changes took away 650 bps of same store sales growth). The macro condition remains unfavorable considering the company’s concentration in Texas. Of course, these short-term swings do not impact the company’s long-term outlook. Performance Since Inception Click to enlarge Disclosure: I am/we are long CONN, SPY, I, CALL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. Editor’s Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.