By Bert Wilkison
Below is a list of five steadily up-trending stocks with relatively high RSIs and ADXs that may continue to trade up or potentially pull-back in the near-term for better buying opportunities. I have also included an up-trending stock that is technically uber-overbought that you may wish to avoid or consider for a short-term short potential.
1. The Gap, Inc. (GPS) RSI: 71.15 ADX: 70.65
The Gap describes itself as a leading global specialty retailer offering clothing, accessories and personal care products for men, women, children and babies. With about 132k employees and about 3k company-operated stores and about 200 franchise stores, its presence is felt around the world.
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Its stock currently trades at $24.41 with 488.31M shares out, giving it a market cap of $11.92B. Institutional ownership stands at about 57% with the short interest as of 02/15/12 being 22.13M. Shares of GPS are up about 28% over the last month.
The average analyst consensus price target is $24.64.
Last week The Gap had the second-highest analyst price-target percentage increase (9.94%) of all companies in the S&P's 500 Index (SPX). The stock's rally started on 02/02/12 when it raised its Q4 2011 guidance by a penny. It then announced a $1B share repurchase program on 02/23/12.
2. ATP Oil & Gas Corp. (ATPG) RSI: 73.53 ADX: 49.61
ATP Oil & Gas describes itself as being engaged in the acquisition, development and production of natural gas and oil properties in the Mediterranean Sea, the Gulf of Mexico and the North Sea. It acquires and develops properties, many of which have proved undeveloped reserves at the time of acquisition that are economically attractive to the company, but not strategic to exploration-oriented oil and gas companies.
Its stock currently trades at $8.61 with 51.62M shares out, giving it a market cap of $444.44M. Institutional ownership stands at about 54% with the short interest as of 02/15/12 being 18.53M. Shares of ATPG are up more than 32% over the last month and up about 21% over the last week.
The average analyst consensus price target is $6.50.
Some of the run can be attributed to the recent spike in oil and gas prices. ATP announced on 02/02/12 that it had sold a $ 25M USD-denominated limited term overriding royalty interest in its Gomez Hub. It also provided an update on its development activities at the Telemark Hub, declaring that it had completed the drilling of the Mississippi Canyon 942 #2 well to a measured depth of 21,400 feet. On 02/23/12 the company provided positive updates on its reserves and production.
3. Banco Santander Brasil SA (BSBR) RSI: 76.97 ADX: 50.80
Banco Santander is described as a Brazil-based bank that operates as a multiple service bank. It offers a range of individual and corporate banking services, like savings accounts, credit operations, financing, leasing, mortgage and automobile lending, investment services, portfolio management, pension plans, life and property insurance policies, credit and debit cards, asset management and insurance brokerage operations.
Its stock currently trades at $11.14 with 3.80B shares out, giving it a market cap of $42.34B. Institutional ownership stands at about 66% with the short interest as of 02/15/12 being 6.77M. Shares of BSBR are up more than 10% over the last month.
The average analyst consensus price target is $12.75.
Banco Santander has benefitted nicely from the recent run on bank stocks, despite recently having reported nearly an 11% decrease in earnings and, even more discouraging, a 13.5% decrease in net income. To make things seem even worse for one of the world's largest banks, the company increased its long-term debt by roughly 13%, taking it to $49B.
4. Comcast Corp. (CMCSA) RSI: 74.15 ADX: 60.18
Comcast describes itself as one of the world's leading media, entertainment and communications companies. It is principally involved in the operation of cable systems through Comcast Cable and in the development, production and distribution of entertainment, news, sports and other content for global audiences through NBC Universal.
Its stock currently trades at $29.24 with 2.71B shares out, giving it a market cap of $79.12B. Institutional ownership stands at about 64% with the short interest as of 02/15/12 being 31.23M. Shares of CMCSA are up nearly 8% over the last month.
The average analyst consensus price target is $34.00.
On 02/15/12, Comcast increased its dividend by 44%, while at the same time announcing a new $6.5B share repurchase program. In its most recent earnings release, it beat analyst EPS estimates by $0.06 per share and reported a 37% increase in business services gross revenues.
5. VIVUS, Inc. (VVUS) RSI: 70.39 ADX: 40.44
Vivus describes itself as a biopharmaceutical company focused on developing innovative, next-generation therapies to address unmet needs in obesity, diabetes, obstructive sleep apnea and sexual health.
Its stock currently trades at $21.64 with 89.15M shares out, giving it a market cap of $1.93B. Institutional ownership stands at about 80% with the short interest as of 02/15/12 being 15.33M. Shares of VVUS are up by more than 70% over the last month.
The average analyst consensus price target is $26.00.
Much of the stock's strength is due to the company's announcement on 02/22/12 that the U.S. Food and Drug Administration Endocrinologic and Metabolic Drugs Advisory Committee recommended that the company's flagship product candidate, Qnexa, be granted marketing approval by the FDA for the treatment of obesity in adults. The Committee voted 20 - 2, in favor of an FDA approval, based on its benefit/risk profile. Some of the jump in share price may also be attributed to short covering.
The company announced last week that it would be selling 9M shares at $22.50 in a public offering to fund its efforts to build the company out, in anticipation of FDA approval of Qnexa. Underwriters of the offering have the standard 30-day window, in which they may purchase and additional 1.35M shares to cover any over-allotments. I am watching for a bit more of a pull-back before considering an entry point and potentially averaging in to a long position.
One to avoid or possibly look for a good short entry point on:
Skyworks Solutions, Inc. (SWKS) RSI: 90.98 ADX: 66.62
Skyworks Solutions describes itself as an innovator of high reliability analog semiconductors. Leveraging core technologies, it offers diverse standard and custom linear products supporting automotive, broadband, cellular infrastructure, energy management, industrial, medical, military, networking, smartphone and tablet applications. The company's portfolio includes amplifiers, attenuators, circulators, detectors, diodes, directional couplers, front-end modules, hybrids, infrastructure RF subsystems, isolators, lighting and display solutions, mixers/demodulators, optocouplers, optoisolators, phase shifters, PLLs/synthesizers/VCOs, power dividers/combiners, power management devices, receivers, switches and technical ceramics.
Its stock currently trades at $27.46 with 188.27M shares out, giving it a market cap of $5.17B. Institutional ownership stands at about 86% with the short interest as of 02/15/12 being 7.04M. Shares of SWKS are up nearly 16% over the last month.
The average analyst consensus price target is $28.00.
On 01/19/12, the company issued Q2 2012 revenue guidance above analyst estimates. On 02/13/12, analyst firm Needham & Company reiterated its buy rating and on 02/24/12, Avian Analysts initiated coverage on the company issuing a "positive" rating on the stock. My "avoid or look-to-short" feelings are based primarily on the stock's technically overbought conditions, its relatively high forward P/E of 17.32 and its most recently reported -6.10% YOY quarterly earnings growth. The stock seems to have gotten quite a bit ahead of itself and I can see a notable pull-back in the near-term.