Top 10 List as of 12/16/2012

Written by MichaelGLamothe on . Posted in Top 10 List

I am pretty underwhelmed by the stocks in the Top 10 List this week.  The average score declined from 9.11 last week to 9.04 this week.  The stronger the average rating the better and a lower rating to me implies greater risk in general.  Additionally, many of the stronger bases I’ve seen this week seem to be setting up in the lower ranked industry groups for the most part.  I personally won’t invest in a stock at all if it falls outside my Top 10 because I’m only looking to invest in what I’m considering the best merchandise in the market for a given week.  The main reason for generating a “Top 10″ list is to try to stack the odds in our favor as much as possible and only investing in the best stocks in the market aims to do just that.  I’m also very hesitant to start a position that fails to obtain a 9.5 rating or higher because of the greater implied risk.  All stocks carry risk, but there’s no reason for me, especially as a part-time investor who doesn’t rely on the market to pay his bills, to take on more risk than necessary.   

Rank Rating Symbol Name EPS Due Date Notes
1 9.5 CELG Celgene Corp 01-26-2013

BASE/CHART: CELG broke out of and reversed from a 1st stage flat base that is 9wks long and 12% deep.  It has a pivot point of $81.24.  There are 5 up weeks vs 4 down weeks in the base. There is tightness on the right side of the base.  The RS line has recovered since breaking down hard in June and the RS rating is okay.  10 so far. 

EARNINGS: annual earnings are projected at 29% in 2012 but only 14% in 2013 (-.25).  The ROE, EPS growth rate and earnings stability ratings are all very strong.  Quarterly EPS is strong but quarterly sales are below the 25% I’d prefer to see (-.25)  9.5 so far. 

GROUP: currently ranked 35. 

OWNERSHIP: fund ownership increased last quarter after being down slightly.  However, fund ownership has been steadily rising since March 2011.  Management holds 1% of shares and there are 5 top funds in CELG.

OVERALL: 9.5

 

2 9.35 CVLT Commvault Systems Inc 02-01-2013

BASE/CHART: CVLT is working on completing a 1st stage ascending base that is 11wks long and has a $69.92 pivot point.  It had pullbacks of 11%, 10%, and 8%.  Seeing the pullbacks become shallower is an encouraging sign.  The up weeks have come on very high volume.  The RS line is making new hights and the RS rating is strong.  10 so far. 

EARNINGS: 2013 annual earnings are projected to rise 31%.  The EPS growth rate is a little low (-.15) but the earnings stability rating and ROE are strong.  Quarterly EPS is very strong but quarterly sales just miss the 25% we look for (-.25).  9.6 so far. 

GROUP: currently 54 (-.25) takes us to 9.35. 

OWNERSHIP: fund ownership has risen for 7 straight quarters.  There are 5 top funds in CVLT and management owns 12% of shares. 

OVERALL: 9.35

 

3 9.2 LAD Lithia Motors Inc Cl A 02-18-2013

BASE/CHART: LAD is forming a 2nd stage cup w/ handle that is 8wks long, 15% deep with an 8% handle.The pivot point is $36.99.  There are 5 weeks down and 3 weeks up so far (-.25)  The shape of the base looks good and there is a dry up in volume in the handle.  The RS line is rising and making new highs and the RS rating is strong.  9.75 so far. 

EARNINGS:  annual earnings are estimated to rise 48% this year but only 11% next year (-.25).  The EPS growth rate is very strong but the ROE falls short of the 17% minimum (-.1).  The earnings stability rating is above 30 (-.2).   Quarterly earnings and sales are strong.  9.2 so far. 

GROUP: currently ranked 30.  Still 9.2

OWNERSHIP: fund ownership rose last quarter after dipping slightly the prior quarter.  There is 1 top fund in LAD and management holds 5% of shares. 

OVERALL: 9.2

 

4 9.05 ASGN On Assignment Inc 02-14-2013

BASE/CHART: ASGN is forming a 2nd stage flat base that is 12 weeks long, 14% deep w/ a $20.93 pivot point.  There are 5 weeks up and 7 weeks down (-.25).  There is tightness in the base along the 10wk line and a shake out below the 10wk line. However, the line is now pointed down which is a negative sign. The RS line was rising but seems to have flattened out over the past quarter.  The RS rating is still strong.  9.75 so far. 

EARNINGS: Annual earnings are projected to rise 68% this year but only 13% next year (-.25).  The eps growth rate and ROE are weak (-.25).  The earnings stability rating is very poor (-.2).  Quarterly EPS and Sales are both very strong.  9.05 so far. 

GROUP: currently ranked 23. 

OWNERSHIP: fund ownership has risen since dec 2010.  It dipped slightly in June 2012 but recovered this quarter.  There are 3 top funds in ASGN and management holds 6% of shares. 

OVERALL: 9.05

 

5 9 EBAY Ebay Inc 01-16-2013

BASE/CHART: EBAY dropped below the $50.94 pivot this wk after breaking out on strong vol 2wks ago.  It finished at the bottom of it’s weekly rankge but did close above the 10wk line.  The base was 5wks long and 10% deep.  There are 4weeks down and 1 week up in the base but the decline came in below avg vol and the breakout came on high vol so I’ll give EBAY a pass on the up vs down weeks.  The RS line is trending up and the RS rating is strong.  10 so far. 

EARNINGS: annual earnings are projected to rise 16% this year and 17% next year (-.25) The ROE and growth rates are low (-.25) while the earnings stability rating is strong.  Quarterly earnigns and sales are below the 25% I look for. (-.5).  9 so far. 

GROUP: currently ranked 31. 

OWNERSHIP: fund ownership has steadily risen for 8 straight quarters. There are 9 top funds in EBAY and management holds 11% of shares. 

OVERALL: 9

 

6 9 SHW Sherwin-Williams Co 01-31-2013

BASE/CHART: SHW broke out of a 2nd stage flat base w/ little vol and then quickly reversed and headed toward the 10wk line. The base is 6wks long, 12% deep, and has a $156.50 pivot point. There was a high vol drop below the 10wk line in the base but an even higher volume climb back above it.  The RS line is rising overall and the RS rating is strong. 9.9 for having tripped the 7% sell rule. (also notable is SHW held close to the 10wk line and the sell off has come in progressively lower vol. 

EARNINGS: annual earnings are projected to grow 32% this year, but 19% next year (-.25) The EPS growth rate is weak (-.15) but the ROE is strong.  The earnings stability rating is below 30 (another positive quality).  Quarterly EPS has been strong but sales have not risen as much as I’d like to see (25% or greater) (-.25).  9.25 so far. 

GROUP: currently ranked 49. (-.25) 9 so far.

OWNERSHIP: fund ownership has risen for 5 straight quarters.  Mgt holds 3% of shares and there are 3 top funds in SHW. 

OVERALL: 9

 

7 8.95 WAC Walter Investment Mgmt 03-07-2013

BASE/CHART: after running up from Aug to the beginning of Nov, WAC has put in a 3rd stage cup shaped base that is 7wks long 24% deep with a $48.54 pivot point. (-.25) for being a 3rd stage base. There are 4wks up vs 3wks down. Despite the higher vol drop, all but 1wk finished toward the top of its range. The vol on the climb of the rt side of the base is a little light.. The RS line is steepily climbing and close to new highs.  The RS rating is very strong. 9.75 so far. 

EARNINGS: Annual earnings are estimated at 72% this year and 91% next year.  The EPS growth rate is strong but the ROE is weak (-.1) and the earnings stability is poor (-.2).  Quarterly earnings are strong but quarterly sales were weak this past quarter (-.25).  9.2 so far.   

GROUP: currently ranked 1. 

OWNERSHIP: fund ownership rose last quarter but fund ownership over the past several quarters has been inconsistent (-.25).  There is 1 top fund in WAC and mgt holds 7% of shares. 

OVERALL: 8.95

 

8 8.8 DDD Three D Systems Corp 02-18-2013

BASE/CHART: DDD broke out, failed, and then broke out again about 2wks ago from a 3rd stage cup shaped base that was 8wks long, 28% deep with a $44.80 pivot point. It closed at the bottom of it’s range this week but held 2% above the pivot. (-.25) for the 3rd stage base. 5 of the 8 weeks were down (-.25) and 5 of the 8 weeks are below the 10wk line (-.5).  9 so far. 

EARNINGS: annual earnings are estimated to rise 71% this year and 28% next year.  The EPS growth rate is very strong and the ROE is strong as well.  The earnings stability rating is weak (-.2).  Quarterly earnings and sales are both very strong.  8.8 so far. 

GROUP: currently ranked 2. 

OWNERSHIP: fund ownership has been steadility rising over the past year.  Management presently holds 12% of shares and there are 2 top funds in DDD. 

OVERALL: 8.8

 

9 8.8 VPFG Viewpoint Financial Grp 02-25-2013

BASE/CHART: VPFG gets (-.2) for me right off the bat for being thinly traded. I like to see about 400k shares/day or more. VPFG looks to be working on a 3rd stage flat base that is 6wks long, 13% deep and has a $21.99 pivot point.  (-.25) because the base is 3rd stage.  There are 3 weeks up and 3 weeks down. There is tightness on the right side of the base and VPFG has held the 10wk lin the past 4 wks.  The RS line is rising and the RS rating is strong. 9.55 so far.

EARNINGS: annual earnings are projected to frow 23% this year and 22% next year.  I look for 25% or better (-.25).  The EPS growth rate is very strong but the ROE is weak (-.1) and the earnings stability rating is strong.  Quarterly earnings and sales appear to be strong.  9.2 so far. 

GROUP: currently ranked 73 (-.5) brings us to 8.8 

OWNERSHIP: fund ownership has risen for 3 straight quarters and has been rising overall.  Mgt holds 2% of shares and there is 1 top fund in VPFG. 

OVERALL: 8.8

 

10 8.7 RMD Resmed Inc 01-26-2013

BASE/CHART: RMD is broke out of a 2nd stage flat base that is 7 weeks long and 10% deep with a $42.30 pivot point though volume was weak.  There are 4 weeks up and 3 weeks down.  The RS line is making new highs and the RS rating is strong. 10 so far. 

EARNINGS: annual earnings are estimated to increase only 12% next year (-.25).  EPS growth, ROE and earnings stability are all strong.  Quarterly EPS is strong and accelerating (+.5) but sales are weak (-.25).  10 so far. 

GROUP: currently ranked 110 (-1) 9 so far. 

OWNERSHIP: fund ownership rose the past 2 quarters but has been very inconsistent (-.25).  There are no top funds in RMD (-.05) and management holds 6%. 

OVERALL: 8.7

 

None of these stocks or ratings should be misconstrued as recommendations to buy, sell, or hold.  They are presented here for educational and demonstrative purposes only.  All ratings are based on my Stock Evaluation Guide and the charts/data provided by MarketSmith

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MichaelGLamothe

Founder of ChartYourTrade.com

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