Intel (NASDAQ: INTC) recently got the “Barron’s bump,” with the influential publication calling for 30% upside over the next two years as the company’s mobile chip division continues to catch up with competitors. Yet, Barron’s may have underestimated the speed at which this rally could take place, as Intel is at the forefront of what could be the next great technological revolution. And I think traders can leverage this into 76% gains in the next few months. No one would deny that Intel was late to the mobile device party, i.e., tablets and smartphones. It largely focused… Read More

Intel (NASDAQ: INTC) recently got the “Barron’s bump,” with the influential publication calling for 30% upside over the next two years as the company’s mobile chip division continues to catch up with competitors. Yet, Barron’s may have underestimated the speed at which this rally could take place, as Intel is at the forefront of what could be the next great technological revolution. And I think traders can leverage this into 76% gains in the next few months. No one would deny that Intel was late to the mobile device party, i.e., tablets and smartphones. It largely focused on “old tech,” making chips for PCs while companies like Qualcomm (NASDAQ: QCOM) and ARM Holdings (NYSE: ARM) rushed into the mobile processor space.  Intel’s management has acknowledged their mistakes and has vowed to capture market share with aggressive pricing, superior chip performance and integration. To that end, the company recently combined its PC and mobile units to increase efficiency.  #-ad_banner-#The transformation is starting to pay off. Midway through this year, the company had 4% to 5% of the global tablet market. If it meets estimates to ship 40 million tablet chips this year, it will… Read More

You can often find a direct correlation between earnings estimate revisions and share prices. As analysts boost profit forecasts, the stock invariably follows suit. This is why management at MicroStrategy, Inc. (Nasdaq: MSTR) recently embarked on a far-reaching cost-cutting plan. #-ad_banner-#​MicroStrategy operates in a field known as Business Intelligence, providing a range of consulting services and software programs that help companies analyze and manage enterprise data. Investors knew that the company carried far too much overhead relative to its peers. In July, management set a goal to reduce annual expenses by $40 million. By October, they… Read More

You can often find a direct correlation between earnings estimate revisions and share prices. As analysts boost profit forecasts, the stock invariably follows suit. This is why management at MicroStrategy, Inc. (Nasdaq: MSTR) recently embarked on a far-reaching cost-cutting plan. #-ad_banner-#​MicroStrategy operates in a field known as Business Intelligence, providing a range of consulting services and software programs that help companies analyze and manage enterprise data. Investors knew that the company carried far too much overhead relative to its peers. In July, management set a goal to reduce annual expenses by $40 million. By October, they boosted that savings target to around $75 million. “We’re trying to run a much tighter ship and challenge basically every single dollar we’re spending,” said CFO Douglas Thede on the company’s third-quarter conference call. Simply shaving off the fat, which should help profit margins move back in tandem with the peer group, has been predictably well-received on Wall Street. MicroStrategy’s belt-tightening came in the form of eliminating 800 jobs (20% of the workforce), consolidating administrative overlap, reducing resources in China and shuttering satellite offices in Russia and other countries. Read More

The five-year bull market, which has seen the S&P 500 rise more than 200% since the March 2009 low, boosted share prices in virtually every sector. A stable U.S. economy gets much of the credit. As has been the case throughout the bull market, some investors are expressing concern that the bull may be getting tired, while others see more gains ahead. #-ad_banner-##-ad_banner-#“Stocks are getting expensive, but higher analyst expectations for forward earnings justify the prices,” say some pundits. Others note that the rally is fueled by an expansion of credit and liquidity that will take prices higher. Frankly, it’s… Read More

The five-year bull market, which has seen the S&P 500 rise more than 200% since the March 2009 low, boosted share prices in virtually every sector. A stable U.S. economy gets much of the credit. As has been the case throughout the bull market, some investors are expressing concern that the bull may be getting tired, while others see more gains ahead. #-ad_banner-##-ad_banner-#“Stocks are getting expensive, but higher analyst expectations for forward earnings justify the prices,” say some pundits. Others note that the rally is fueled by an expansion of credit and liquidity that will take prices higher. Frankly, it’s hard to call market tops and bottoms, but we do know that stocks that rise the fastest often fall the hardest during a pullback. And right now, shares of our nation’s railroad operators are looking especially vulnerable. Three stocks in particular rose an average of roughly 500% since March 2009. To understand why caution is advised, you need to turn the clock back to 2007 — two years before the bull market began. At the time economists pointed to limited supply and surging demand to rationalize optimism for railroad shares. Is 2015 The Year Rail Carriers Derail? To be… Read More

As earnings season closed, the window for insiders opened. And they took great advantage of this opportunity, with dozens of executives, directors and key shareholders making six figure investments in their own company stock. That window will soon close for most insiders as year-end reports are prepared, making this a good time to review some of the savviest trades of the past month.  After poring over all of the action, these four companies should be on your radar. (All data supplied by InsiderInsights.com) Hertz Global Holdings, Inc. (NYSE: HTZ) This vehicle rental firm has… Read More

As earnings season closed, the window for insiders opened. And they took great advantage of this opportunity, with dozens of executives, directors and key shareholders making six figure investments in their own company stock. That window will soon close for most insiders as year-end reports are prepared, making this a good time to review some of the savviest trades of the past month.  After poring over all of the action, these four companies should be on your radar. (All data supplied by InsiderInsights.com) Hertz Global Holdings, Inc. (NYSE: HTZ) This vehicle rental firm has had a miserable few months. The company revealed a long period of financial mismanagement that will lead to the re-statement of results for 2011, 2012 and 2013. #-ad_banner-#​While the board was cleaning house, it concluded that the company’s operations had grown too bloated, and authorized a plan to cut operating expenses by $100 million. Part of Hertz’s woes stem from acquisition indigestion related the 2013 purchase of Dollar Thrifty. The board also brought in a new CEO, John Tague, an outsider with extensive experience in the fields of airlines and logistics.  “The… Read More

Back in 2010, as the U.S. was trying to claw its way out of the financial crisis, unemployment was at 10%, consumer confidence was below 50, and oil prices… were at about the same level they are today. The price of West Texas Intermediate (WTI) crude oil plummeted more than 30% since June, hitting a four-year low this week at $73.25 a barrel. #-ad_banner-#This marks the fourth major correction in oil prices since the beginning of the Great Recession. And a look back shows an emerging trend that traders could leverage into 50%-plus profits in the next few months.  In… Read More

Back in 2010, as the U.S. was trying to claw its way out of the financial crisis, unemployment was at 10%, consumer confidence was below 50, and oil prices… were at about the same level they are today. The price of West Texas Intermediate (WTI) crude oil plummeted more than 30% since June, hitting a four-year low this week at $73.25 a barrel. #-ad_banner-#This marks the fourth major correction in oil prices since the beginning of the Great Recession. And a look back shows an emerging trend that traders could leverage into 50%-plus profits in the next few months.  In the chart below, we see that no prior sell-off since 2009 has eclipsed the low of the previous year — let alone pushed prices to a multiyear low. This tells me that oil is in a very oversold condition.  Further, the three previous corrections have lasted an average of about five months, which is how long the current sell-off has been going on. Even more interesting, is that prices regained an average of 64% of their drop within six months of their low.  I doubt that oil will trade back to its highs above $107 a… Read More

With the broader market trading near its all-time highs, I’m on the lookout for catch-up candidates with clearly defined support areas. These stocks tend to offer trades with attractive risk/reward profiles. Shares of fast food restaurant operator Wendy’s (NASDAQ: WEN) are down 2.4% in 2014 compared with a 10.4% gain in the S&P 500. But with earnings out of the way and the stock displaying strength on its weekly and daily charts, WEN looks ripe for a bullish trade. #-ad_banner-#Before the start of trading on Nov. 6, the company reported weaker-than-expected results for its fiscal… Read More

With the broader market trading near its all-time highs, I’m on the lookout for catch-up candidates with clearly defined support areas. These stocks tend to offer trades with attractive risk/reward profiles. Shares of fast food restaurant operator Wendy’s (NASDAQ: WEN) are down 2.4% in 2014 compared with a 10.4% gain in the S&P 500. But with earnings out of the way and the stock displaying strength on its weekly and daily charts, WEN looks ripe for a bullish trade. #-ad_banner-#Before the start of trading on Nov. 6, the company reported weaker-than-expected results for its fiscal third quarter. Adjusted earnings of $0.08 per share were flat year over year and missed expectations by a penny. Revenue declined 20% to $512.5 million, also below analysts’ estimates for $516.7 million. Wendy’s blamed the weak results on a 10-basis-point decline in company-operated margins to 15.5% on higher commodity costs, especially beef prices. Yet, the stock closed 2.4% higher on the day and is up 5.6% since the announcement. Investors were likely cheered by the 2% increase in comparable store sales for the quarter and management reaffirming its full-year outlook. Furthermore, they announced a $30 million cost-cutting initiative. On the… Read More

A mid-October computer glitch led to one of the stranger IPO stories in recent memory. An obscure drug company saw its shares incorrectly priced at $200,000 apiece, reflecting a market value of $3.9 trillion, according to Bloomberg. It’s hard to line up demand for shares when that kind of valuation is already in place. It’s a good thing that the error was quickly fixed. Shares of Atara Biotherapeutics, Inc. (Nasdaq: ATRA) were eventually priced at $11 a share, zoomed to nearly $30 a share in early November, and have recently back-slid toward the $20 mark on profit-taking. At current prices,… Read More

A mid-October computer glitch led to one of the stranger IPO stories in recent memory. An obscure drug company saw its shares incorrectly priced at $200,000 apiece, reflecting a market value of $3.9 trillion, according to Bloomberg. It’s hard to line up demand for shares when that kind of valuation is already in place. It’s a good thing that the error was quickly fixed. Shares of Atara Biotherapeutics, Inc. (Nasdaq: ATRA) were eventually priced at $11 a share, zoomed to nearly $30 a share in early November, and have recently back-slid toward the $20 mark on profit-taking. At current prices, this biotech holds a great deal of appeal. Atara, which was spun off from biotech behemoth Amgen, Inc. (Nasdaq: AMGN) in 2012, is pursuing drug treatments for muscle wasting conditions and cancer. The company’s lead drug compound, PINTA 745, has progressed into Phase II clinical trials. The Phase I study showed  that the drug markedly increased muscle mass in patients with end-stage kidney disease who developed protein energy wasting (PEW) syndrome, a condition of increasing frailty and muscle shrinkage. PINTA 745 aims to improve these patients’ quality of life by enhancing their physical strength. The potential market opportunity is… Read More

Jack Welch, the legendary former CEO of General Electric Co. (NYSE: GE), repeatedly cited a 1975 report in the Harvard Business Review. It said that market share leaders are the better company compared to the peer group, as they “are likely to have a higher profit margin, a declining purchases-to-sales ratio, a decline in marketing costs as a percentage of sales, higher quality and higher priced products.” That strategy was well-honed by chip giant Intel Corp. (Nasdaq: INTC), which has consistently taken market share from rivals such as Advanced Micro Devices, Inc. (NYSE: AMD). The proof… Read More

Jack Welch, the legendary former CEO of General Electric Co. (NYSE: GE), repeatedly cited a 1975 report in the Harvard Business Review. It said that market share leaders are the better company compared to the peer group, as they “are likely to have a higher profit margin, a declining purchases-to-sales ratio, a decline in marketing costs as a percentage of sales, higher quality and higher priced products.” That strategy was well-honed by chip giant Intel Corp. (Nasdaq: INTC), which has consistently taken market share from rivals such as Advanced Micro Devices, Inc. (NYSE: AMD). The proof of the scorched earth strategy was found in the numbers: Intel’s gross profit margins surged to 65% in 2010 from 52% in 2007. To be sure, Intel has endured a challenging slowdown in the PC industry, yet an impressive share price rebound over the past two years suggests the worst of the PC storm has passed. As we have said on a number of occasions: we think Intel possesses the key ingredients of a “Forever Stock” — a wide moat around its business and a solid history of buybacks and dividends. But even the best companies need to be assessed… Read More

Shares of Monster Beverage (NASDAQ: MNST) soared almost 8% Friday to fresh all-time highs after the company reported better-than-expected earnings. While the stock remains attractively positioned in the longer term from a technical perspective, the daily chart has grown increasingly steep since late August, and Friday’s rally took it vertical. #-ad_banner-#Traders now have a chance to make quick profits on a bearish reversal and classic mean-reversion move lower. On Thursday after the close, Monster reported earnings for the third quarter increased 32% year over year to $0.70 a share, beating estimates for $0.68. Sales… Read More

Shares of Monster Beverage (NASDAQ: MNST) soared almost 8% Friday to fresh all-time highs after the company reported better-than-expected earnings. While the stock remains attractively positioned in the longer term from a technical perspective, the daily chart has grown increasingly steep since late August, and Friday’s rally took it vertical. #-ad_banner-#Traders now have a chance to make quick profits on a bearish reversal and classic mean-reversion move lower. On Thursday after the close, Monster reported earnings for the third quarter increased 32% year over year to $0.70 a share, beating estimates for $0.68. Sales grew 8% from the same quarter a year ago, but revenue of $636 million was below the $642 million estimated by analysts. Following the earnings report, brokerage firm Stifel Nicolaus reiterated its “buy” rating on the stock, raising its price target price to $115 from $110. Credit Suisse (NYSE: CS) also restated its “outperform” rating and bumped its target to $115 from $98.  Their target sits about 7% above current prices, but the charts say traders have a better chance at making profits on the downside here. After an exhaustive run into June 2012, MNST sold off hard… Read More

After a big sell-off in early October, stocks are back with a vengeance. The uncertainty about the Fed and the end of quantitative easing is off the table, as is the uncertainty over the midterm elections.  Not surprisingly, traders now are turning to more substantive, company-specific metrics to identify winning stocks. One trader friend of mine told me yesterday that he can now “get back to doing what I do best.” And by that he meant finding high-quality momentum stocks “that are just killing it” and riding their coattails to big gains. Sounds good, but in the vast universe of… Read More

After a big sell-off in early October, stocks are back with a vengeance. The uncertainty about the Fed and the end of quantitative easing is off the table, as is the uncertainty over the midterm elections.  Not surprisingly, traders now are turning to more substantive, company-specific metrics to identify winning stocks. One trader friend of mine told me yesterday that he can now “get back to doing what I do best.” And by that he meant finding high-quality momentum stocks “that are just killing it” and riding their coattails to big gains. Sounds good, but in the vast universe of tradable equities, how do you consistently identify the winners? #-ad_banner-# The key indicator I use is relative strength (RS).  I suspect you are aware of the concept of relative strength, as it’s by no means a new tool in traders’ kits. In fact, relative strength is something I first used back in the mid-1990s to identify those stocks most likely to move higher. In case you aren’t familiar with the indicator, relative strength compares a stock’s performance against the performance of… Read More