Top 10 List as of 03/01/2013
For the second straight week the “Top 10″ is in name only. 9 stocks have made the list this week. The overall rating of this list dropped from 8.93 last week to 8.7 this week. This is largely a factor of the poor ratings of both MA and V both of which scored 7.75 this week. (I ranked MA above V because it happened to have a higher composite rating but I feel you could easily have just flipped a coin as they are so close. Regardless, I personally wouldn’t go for a stock that produced a 7.75 rating, but that’s just me).
When I am entering a position for the first time, I’ve found that I have better results entering on a breakout from a primary base as opposed to a secondary buying area such as a 3 weeks tight or a bounce from the 50dma. I’ve noted several of what I consider fundamentally strong stocks setting up in these secondary buy zones in the “Ready List Stocks not in the Top 10.” If we get a follow through day next week and I’m able to enter one of the stocks in a secondary buy zone, I may do it but it would be a much smaller position (about half the size of a full).
| Rank | Rating | Symbol | Name | EPS Due Date | Notes |
| 1 | 9.65 | EVER | Everbank Financial Corp | 05-23-2013 |
BASE/CHART: EVER is forming a 2nd stage double bottom that is 17wks long, 21% deep, and has a $15.83 pivot. There are 7wks down and 10wks up. Most weeks have finished in the top of their range and on rising vol. The RS line has some work to do. The RS rating has improved to 81. 10 so far. EARNINGS: annual earnings are estimated to rise 17% this year. (-.25) The EPS growth rate is strong at 36% but the earnings stability rating is weak at 45 and the ROE is lower than what I look for at 12%. (-.3). Quarterly earnings and sales are strong and the quarter sales have accelerated the past several quarters (+.25) 9.7 so far. GROUP: currently ranked 34 OWNERSHIP: fund ownership has risen since inception and the number of funds leaped about 40% in the most recent quarter. Mgmt holds 41% of shares. However, there are no top fund in EVER (-.05) OVERALL: 9.65
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| 2 | 9.5 | OCN | Ocwen Financial Corp | 05-03-2013 |
BASE/CHART: Since breaking out of a 3rd stage (-.25) cup w/ handle 5wks ago, OCN retested the 10wk line and bounced off it in higher volume. The base is 14wks long, 21% deep, has about a 10% handle. The pivot is at $39.25. There are 5wks up vs 9wks down (-.25) But there are 3wks of significant accumulation in the base (up on strong vol) vs no signs of strong distribution in the base. There is a 3wks tight formed at the bottom of the base, also a good sign. The RS line is still trending higher though flat since Oct. The RS rating is very strong at 98 9.5 so far. EARNINGS: annual earnings are estimated to rise 242% this year. The EPS growth rate, earnings stability rating, and ROE have improved but are all still below the levels I like to see (-.45) Quarterly sales are very strong and quarterly EPS is strong and accelerated (+.5) 9.55 so far. GROUP: currently ranked 12. OWNERSHIP: fund ownership has risen steadily for 7 straight quarters but there are no top funds in OCN (-.05). Management holds 20% of shares. OVERALL: 9.5
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| 3 | 9.2 | WAC | Walter Investment Mgmt | 03-07-2013 |
BASE/CHART: WAC formed a 3rd stage (-.25) base on base pattern with the latest base being a flat base that is 5wks long, 14% deep, and has a $49.67 pivot. It attempted to break out 2wks ago and failed. It’s now retesting the 10wk line. There are 3wks up and 2wks down. The base has shown support at the 10wk line and there has been more vol to the upside. The RS line is close to a new high and the RS rating is very strong at 98. 9.75 so far. EARNINGS: annual earnings are estimated to rise 122% this year. The EPS growth rate is strong at 51% but the earnings stability rating is weak at 64 (-.2) and the ROE is weak at 8% (-.1). Quarterly earnings are strong but quarterly sales are below 25% (-.25) 9.2 so far. GROUP: currently ranked 12 OWNERSHIP: fund ownership rose last quarter and management holds 7% of shares. There are 2 top funds in WAC. OVERALL: 9.2
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| 4 | 9.15 | FNF | Fidelity Natl Finl Inc | 04-25-2013 |
BASE/CHART: FNF has formed a 2nd stage flat base that is 6wks long, 7% deep and has a $26.41 pivot. There are 3wks up and 3wks down in the base and the right side has formed a 3wks tight. It has held fairly close to the 10wk line throughout the base, the RS line is trending higher overall, and the RS rating is 81. 10 so far. EARNINGS: annual earnings are estimated to drop 8% this year (-.25). The EPS growth rate is strong at 26% and the earnings stability rating is good at 19.. However, the ROE, while improved at 12% is still below the 17% or better I look for (-.1) Quarterly EPS and sales are very strong and quarterly sales have accelerated (+.25). 9.9 so far. GROUP: currently ranked 92 (-.75) takes us down to 9.15 OWNERSHIP: fund ownership has risen the past 4 quarters. Mgmt holds 9% of shares and there is 1 top fund in FNF. OVERALL: 9.15
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| 5 | 8.85 | JAZZ | Jazz Pharmaceuticals Plc | 05-08-2013 |
BASE/CHART: JAZZ formed a 1st stage cup w/ handle that is 18wks long, 21% deep w/ 4% handle. The pivot is at $57.99 pivot. There are only 7 up weeks vs 11 down weeks (-.25) but there are 8 weeks above the 10wk line. Support seems to have come in consistently along the 40wk line. The RS line which was previously very erratic appears to be stabilizing. The RS rating is 75 which is low for a b/o (-.1). Also notable is the 3wks tight in the handle 9.65 so far. EARNINGS: annual earnings are estimated to rise 20% this year (-.25) since JAZZ has only recently begun to have positive earnings, the EPS growth rate and earnings stability are n/a. However, the ROE is 148%. Quarterly EPS and sales are very strong. 9.4 so far. GROUP: currently ranked 80 (-.5) 8.9 so far. OWNERSHIP: fund ownership has risen for 7 straight quarters. Management holds 16% of shares but there are no top funds presently in JAZZ (-.05) OVERALL: 8.85
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| 6 | 8.5 | TRIP | TripAdvisor Inc | 05-01-2013 |
BASE/CHART: TRIP attempted to breakout of a 2nd stage cup with handle but tripped the 8% sell rule. It has, however, managed to hold close to the 10wk line. The base is 28wks long 40% deep and has a 13% handle. The pivot is at $47.00 (-.5) There are 14wks down vs 14wks up. The RS line is rising and the RS rating is 82. 9.5 so far. EARNINGS: annual earnings are projected to rise 14% in 2013 (-.25) The ROE of 43%, EPS Growth rate of 31%, and earnings stability rating of 7 are all very strong. Quarterly EPS and sales, however, are both weaker than the 25% I’d like to see (-.5). 8.75 so far. GROUP: currently ranked 60 (-.25) brings us to 8.5 OWNERSHIP: fund ownership rose the past 2 quarters. There are 5 top funds in TRIP and management owns 16% of shares. OVERALL: 8.5
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| 7 | 8.45 | DORM | Dorman Products Inc | 04-29-2013 |
BASE/CHART: right off the bat (-.25) for being very thinly traded at only 265k 50day avg vol. (I prefer 400k min) DORM attempted to break out of a 2nd stage flat base & tripped the 8% sell rule. It’s base is 5wks long, 9% deep and has a $37.19 pivot. There are 2 up weeks and 3 down weeks but DORM has held the 10wk line throughout the base and even held close to it after the b/o failed. The highest weekly vol in the base was a down week that finished in the upper middle of it’s range. Additionally, most weeks in the base finished near the top of the range so I’ll give it a pass. The RS line trending higher and the RS rating is 90. 9.75 so far. EARNINGS: annual earnings are estimated to rise 20% this year (-.25) The EPS growth rate, ROE and earnings stability ratings are all very strong. Quarterly EPS and sales both slowed in the most recent quarter (-.5) 9 so far. GROUP: currently ranked 75 (-.5) takes us down to 8.5 OWNERSHIP: fund ownership has risen for 6 straight quarters. There are no top funds in DORM (-.05) but management holds 21% of shares. OVERALL: 8.45
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| 8 | 7.5 | MA | Mastercard Inc Cl A | 05-02-2013 |
BASE/CHART: MA has formed another 3rd stage (-.25) flat base that is 5wks long, 5% deep, and has a $535.35 pivot. It is considered another 3rd stage base because it did not rise 20% or greater from the previous base so the count remains the same. There are 3wks down vs 2wks up, however there is tightness in the base and it has held the 10wk line so I’ll give it a pass. The RS line is rising overall but the RS rating needs to improve prior to b/o (currently 75). 9.75 so far. EARNINGS: annual earnings are estimated to rise 16% this year. (-.25) The EPS growth rate, earnings stability rating, and ROE are all strong. Quarterly EPS and sales, however, both fall below the 25% I look for (-.5) 9 so far. GROUP: currently 105 (-1) takes us down to 8. OWNERSHIP: fund ownership rose last quarter. There are 10 top funds in MA but management holds 0% of shares. (-.5) OVERALL: 7.5
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| 9 | 7.5 | V | Visa Inc Cl A | 05-02-2013 |
BASE/CHART: V has formed a 3rd stage (-.25) flat base that is 7wks long, 5% deep and has a 162.77 pivot. It has formed a 5wks tight in the base and has held the 10wk line throughout the base. The recent declining vol in the base is something to take note of but not something I’m taking points off for. There are 3wks up vs 4wks down. Due to the tightness and holding the 10wk line I’ll give it a pass. The RS line is rising and the RS rating is 81. 9.75 so far. EARNINGS: annual earnings are estimated to rise 18% this year (-.25) The EPS growth rate, earnings stability rating, and ROE are all strong. Quarterly EPS and Sales are slightly below the 25% levels I look for. (-.5). 9 so far. GROUP: currently ranked 105 (-1) 8 so far. OWNERSHIP: fund ownership has risen for 7 straight quarters. There are 5 top funds in V but management holds 0% of shares (-.5) OVERALL: 7.5
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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.