Weekly Newsletter   Challenge account   Weekly Newsletter   

ATHR, DV, MED a watch list update

Atheros Communications, Inc. (ATHR) failed my fundamental check list and has been dropped from the watch list.

I added DeVry (DV) to the watch list as a potential buy when this selling pressure fades. And I believe it will fade and the stock will create a new buy opportunity. All the selling is based on news and expectations, which seems to me do not hold water. As long as the US unemployment rate will be as high as it is today, this stock will prosper. Even though politicians and economists working for the government are telling us that employment is improving, I do not expect better data any sooner than next year. Until that DeVry may create several good chances to ride the trend, although the stock is very volatile. The only strong negative issue I can see is that the price crossed 50 DMA on heavy volume which is considered as a strong sell signal. Since fundamentally this stock is very strong, it is now all a technical game only. Here is my fundamental check list:

  2010 2009 2008  
Revenue $473,012(t) $369,615(t) $273,737(t) Pass

  2009 2008 2007  
EPS 1.00 0.59 0.50 Pass

  2009 2008 2007  
ROE 18% 17% 12% Pass

Analyst recommendation: Buy Pass

  03/10 12/09 09/09 06/09  
EPS Surprise +6.87% +20.48% +16.39% +10.45% Pass

  2014 2013 2012 2011 2010
EPS Forecast 6.3 5.48 5.39 4.51 3.67 Pass

EPS Growth Rate (next 5 years) 20.0% Pass

PEG 0.794 Pass

EPS / Industry (TTM) 54.8% 28.09% Pass

Short Interest 7.07 days Fail

Insider Form 4 -482,711 Fail

Weighted Alpha +55.10 Pass

Stock within 15% of 52 week high $69.46 Pass
RS > 70 61 Fail

Even though DV passed this check as a strong buy candidate, it doesn’t mean it will be a winning stock. It has all the prospect to grow and I will keep an eye on it.

Medifast (MED) is still a strong candidate to buy, it passed all my screening, but now I am still waiting for entry point. My entry strategy is to look at two time-frames: a weekly chart and a daily chart. A weekly chart must signal a buy point by an oscillator reversing into uptrend in oversold range, which currently MED’s oscillator is in overbought range ready to diverge into a downtrend and price creating new highs of the right leg of the cup on a very low volume. If the price and volume will continue doing what I am expecting right now we may see a price drop creating the buy opportunity. See the weekly chart:

Click to enlarge

If the weekly chart creates a buy setup, than I take a look at daily chart looking for the same behavior on a daily chart. As soon as the oscillator crosses up (and this time it doesn’t have to be in oversold range, however it is preferred to see it there), it will be my buy point.

Leave a Reply

Your email address will not be published. Required fields are marked *