Cheap stocks for your consideration (20090514)

dividend_growth

 

Selection Criteria:

1) Must occupy a strong competition position within its industry, must exhibit a high level of Return on Invested Capital or ROIC (ROIC is defined as Cash Flow / (Shareholder's Equity + Net Debt)).

 

2) Price / Cash Flow < 10 or Enterprice Value / Free Cash Flow < 10 (Enterprise Value = Market Cap + Net Debt, Free Cash Flow = Cash Flow - Capital Expenditures).

 

3) Must exhibit flat or positive Revenue and EPS Growth in latest quarter.

 

 

Explanation of FA Conditions:

GD has 7.49/10.21/++/+/-/21.82, means Price/Cash Flow = 7.49, Enterprise Value = 10.21, double digit Revenue Growth, single digit EPS Growth, Net Debt > 0, ROIC = 21.82%.

 

IRBT has 8.97/11.27/O/++/18.38/51.12, means Price/Cash Flow = 8.97, Enterprise Value = 11.27, flat Revenue Growth, double digit EPS Growth, Net Cash > 18.35% of Market Cap, ROIC = 51.12%.

 

Some companies, such as AAPL, NFLX, and SOHU, have so little physical assets and so much cash, that their ROIC becomes meaninglessly large. Others, such as BWLD, are spending so much on growing their businesses that their Capital Expenditures exceed their Cash Flows.

 

 

Ticker	Industry	FA Condition	TA Condition	Conclusion
GD	Defense	7.58/10.32/++/+/-/21.82	After major run-up and near major resistance, consolidation ahead.	Wait at least 2 months
IRBT	Defense	9.35/11.86/O/++/18.35/51.12	Seems to have hit bottom, monthly MACD turns positive.	Wait until end of May
LLL	Defense	6.06/10.31/+/+/-/14.79	Major resistances ahead, in bearish consolidation of long term downtrend.	Wait for breakout or lower prices
SAI	Industrial Services	6.51/7.59/+/++/-/25.75	No direction, in narrow consolidation zone since IPO in 2006	Wait for breakout
FLR	Infrastructure	9.92/11.86/++/++/23.63/91.47	Major resistances ahead, in bearish consolidation of long term downtrend	Wait for breakout or lower prices
JEC	Infrastructure	9.81/10.58/++/++/14.96/29.35	Major resistances ahead, in bearish consolidation of long term downtrend	Wait for breakout or lower prices
AAPL	Tech - Hardware	10.58/9.19/+/++/22.74/NM	Weekly MACD works since 2005, shows no sell sign yet.	Buy at ~115
AKAM	Tech - Internet	10.41/13.82/++/O/6.96/25.06	Failed to break major resistance, still in long term downtrend, both weekly and monthly MACD work	Buy now, stop at 18
NFLX	Tech - Internet	7.58/21.09/++/++/13.29/NM	Cuts through all supports, weekly MACD works and is about to give a sell signal.	Wait, unless retakes 100MA with volume
VZ	Telecom	3.10/13.76/++/+/-/19.02	Failed to break major resistance, still in long term downtrend, monthly MACD works since 1996.	Wait until monthly MACD turns positive
MHS	Healthcare - PBM	8.48/10.67/++/++/-/29.91	In consolidation since early 2008, chart looks bullish.	Wait until breakout above 48.
UNH	Healthcare - HMO	6.59/8.38/+/+/-/21.42	Situation similar to LLL.	Wait for breakout or lower prices
SNY	Healthcare - Drugs	6.43/8.18/+/++/-/18.19	Situation similar to LLL.	Wait for breakout or lower prices
SYY	Food	8.49/13.09/O/O/-/32.40	Unclear.	Unclear
BWLD	Restaurant	9.20/NA/++/++/6.90/50.72	Sold off hard after hitting major resistance at 45, weekly MACD works and is about to give a sell signal.	Buy at 32 with stop at 30, or wait for breakout above 46, or pick the bottom at 20.
MVL	Media - Entertainment	7.35/7.35/++/O/-/83.21	In long term consolidation, chart is bullish though.	Wait at least 2 months
SOHU	China Concept	8.67/7.87/++/++/18.30/NM	Support at 200MA, could resume new uptrend, weekly MACD works.	Buy now, stop at 46
EXC	Utilities	4.16/8.78/+/++/-/35.01	In worse shape than LLL, monthly MACD works since 1998.	Wait until monthly MACD turns positive
ROST	Retail Stores	7.76/12.14/+/+/3.80/70.82	In long term consolidation, double head possible.	Wait at least 3 months
WMT	Retail Stores	8.39/20.29/O/O/-/22.88	In very long term consolidation since 1998	Breakout could be immensely powerful!
TRLG	Retail - Specialty	9.64/13.43/++/++/15.06/72.17	In long term consolidation since 2005, almost tripled since low in March.	Buy at 17, stop at 15.5
TSCO	Retail - Specialty	5.80/9.12/++/++/2.89/38.70	In long term consolidation since 2003, a major H-S pattern maybe forming if 30 is broken down.	Buy now, and stop at 29.

 

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dividend_growth

Update for 20090522

 

 

Ticker	Industry	FA Condition	TA Condition	Conclusion
GD	Defense	7.55/10.27/++/+/-/21.82	After major run-up and near major resistance, consolidation ahead.	Wait at least 2 months
IRBT	Defense	9.02/11.35/O/++/18.35/51.12	Seems to have hit bottom, monthly MACD turns positive.	Wait until end of May
LLL	Defense	5.79/9.99/+/+/-/14.79	Major resistances ahead, in bearish consolidation of long term downtrend.	Wait for breakout or lower prices
SAI	Industrial Services	6.19/7.23/+/++/-/25.75	No direction, in narrow consolidation zone since IPO in 2006	Wait for breakout
FLR	Infrastructure	9.64/11.34/++/++/23.63/91.47	Major resistances ahead, in bearish consolidation of long term downtrend	Wait for breakout or lower prices
JEC	Infrastructure	9.32/9.95/++/++/14.96/29.35	Major resistances ahead, in bearish consolidation of long term downtrend	Wait for breakout or lower prices
AAPL	Tech - Hardware	10.51/9.11/+/++/22.74/NM	Weekly MACD works since 2005, shows no sell sign yet.	Buy at ~115, stop at 110
AKAM	Tech - Internet	10.41/13.82/++/O/6.96/25.06	Failed to break major resistance, still in long term downtrend, both weekly and monthly MACD work	Buy now, stop at 18
NFLX	Tech - Internet	7.87/22.02/++/++/12.80/NM	Cuts through all supports, weekly MACD works and just gave a sell signal.	Buy at ~34, stop at 32
VZ	Telecom	2.96/13.42/++/+/-/19.02	Failed to break major resistance, still in long term downtrend, monthly MACD works since 1996.	Wait until monthly MACD turns positive
MHS	Healthcare - PBM	8.07/10.21/++/++/-/29.91	In consolidation since early 2008, chart looks bullish.	Wait until breakout above 48.
UNH	Healthcare - HMO	6.17/7.98/+/+/-/21.42	Situation similar to LLL.	Wait for breakout or lower prices
SNY	Healthcare - Drugs	6.15/7.84/+/++/-/18.19	First time above 200MA since Jan 2008, though still in long term downtrend.	Wait another month
SYY	Food	8.65/13.31/O/O/-/32.40	Unclear.	Unclear
BWLD	Restaurant	8.75/NA/++/++/7.25/50.72	Sold off hard after hitting major resistance at 45, weekly MACD works and is about to give a sell signal.	Buy at 32 with stop at 30, or wait for breakout above 46, or pick the bottom at 20.
MVL	Media - Entertainment	7.45/7.45/++/O/-/83.21	In long term consolidation, chart is bullish though.	Wait at least 2 months
SOHU	China Concept	8.82/8.04/++/++/17.99/NM	Support at 200MA, could resume new uptrend, weekly MACD works.	Buy now, stop at 46
EXC	Utilities	3.95/8.44/+/++/-/35.01	In worse shape than LLL, monthly MACD works since 1998.	Wait until monthly MACD turns positive
ROST	Retail Stores	7.45/10.35/+/+/6.28/70.82	In long term consolidation, double head possible.	Wait at least 3 months
WMT	Retail Stores	8.40/20.31/O/O/-/22.88	In very long term consolidation since 1998	Breakout could be immensely powerful!
GME	Retail - Specialty	6.75/10.86/+/++/-/20.44	In long term downtrend, currently at bottom of a broadening formation, may have violent moves ahead.	Buy a 22.50 straddle may be good idea
TRLG	Retail - Specialty	9.81/13.71/++/++/14.81/72.17	In long term consolidation since 2005, almost tripled from March low.	Buy at 17, stop at 15.5
TSCO	Retail Specialty	5.96/9.37/++/++/2.82/38.70	In long term consolidation since 2003, a major H-S pattern maybe forming if 30 is broken down.	Buy now, and stop at 29.