Seeking Alpha
Value, dividend growth investing, large-cap
Profile| Send Message|
( followers)

Below are the top 5 companies from our Nasdaq 100 watch list that are within 20% of the 52-week low. The complete list of 17 companies can be found here.

Symbol Name Price P/E EPS Yield P/B % from Low
(NASDAQ:APOL) Apollo Group, Inc. $34.46 9.53 3.62 0 3.75 0.76%
(NASDAQ:CSCO) Cisco Systems, Inc. $19.46 14.27 1.36 0 2.40 1.46%
(NASDAQ:ISRG) Intuitive Surgical, Inc. $257.08 30.60 8.40 0 4.92 4.48%
(NASDAQ:AMGN) Amgen Inc. $53.83 11.64 4.63 0 2.12 7.10%
(NYSE:TEVA) Teva Pharma. $50.37 15.50 3.25 1.40% 2.07 7.19%

Watch List Summary

In the Nasdaq 100 watch list of 17 companies from November 10, 2010 to the closing price of November 24,2010, the average return from all of the companies listed was –0.05%. This is compared to the NDX (Nasdaq 100 Index) which had a decline of –1.55%. Urban Outfitter (NASDAQ:URBN) carried our watch list by rising 15.42% while office supplies company Staples (NASDAQ:SPLS) was not far behind with a gain of 9.05%.

The laggards from the November 10, 2010 watch list were Intuitive Surgical, with a –7.51% decline followed closely behind by Apollo Group, which fell –6.46% in APOL’s long quest to find a bottom.

Although we often take an interest in stocks with a declining trend, Apollo Group, with a declining trend over 2 years long, has not found its way on our Speculative Observation list. On the other hand, the steady decline of Intuitive Surgical does warrant additional consideration. Intuitive Surgical has a Dow Theory fair value from the March 2009 low to April 2010 high at $154 with the support level of $256.12 recently broken, the only remaining support levels before the fair value level is $221.90 and $187.68.

Top Five Performance Review

In our ongoing review of the Nasdaq 100 Watch List, we have taken the top five stocks on our list from November 27, 2009 and have checked their performance one year later. The top five companies on that list are provided below with the closing price for November 27, 2009 and November 24, 2010.

Name 2009 2010 change
Cephalon, Inc. (NASDAQ:CEPH)
55.23 65.47 18.54%
Ryanair Holdings (NASDAQ:RYAAY)
25.83 30.99 19.98%
Gilead Sciences (NASDAQ:GILD)
45.56 37.78 -17.08%
Genzyme Corp (GENZ)
51.07 71.81 40.61%
Apollo Group, Inc. (APOL)
55.76 34.46 -38.20%
Average 4.77%
Nasdaq 100 1765.46 2153.91 22.00%

As a group, the top five companies on our Nasdaq 100 list averaged a gain of 4.77% in the last year. This compares with the Nasdaq 100 Index gain of 22% and the Nasdaq Composite gain of 18.52% in the same one-year time frame. Surprisingly, only one stock, Gilead Sciences, did not achieve 10% gains within the first four months.

click to enlarge

Of the two companies that took large losses, Apollo Group fell –38.20% while Gilead Sciences fell –17.08%. It is worth noting that Apollo Group will probably be dropped from the Nasdaq 100 index on December 10th, thereby adding more downside pressure to the stock.

Disclaimer

On our current list, we excluded companies that have no earnings. Stocks that appear on our watch lists are not recommendations to buy. Instead, they are the starting point for doing your research and determining the best company to buy. Ideally, a stock that is purchased from this list is done after a considerable decline in the price and extensive due diligence. We suggest that readers use the March 2009 low (or the companies' most distressed level in the last 2 years) as the downside projection for investing. Our view is to embrace the worst case scenario prior to investing. A minimum of 50% decline or the November 2008 to March 2009 low, whichever is lower, would fit that description. It is important to place these companies on your own watch list so that when the opportunity arises, you can purchase them with a greater margin of safety. It is our expectation that, at the most, only 1/3 of the companies that are part of our list will outperform the market over a one-year period.

Disclosure: No positions