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My forecast is, that the three companies in the tables below will be under-performing, as measured against their Nasdaq 100 peers. In the coming weeks and beyond they should begin to be under moderate pressure. After which, they will go through an undetermined period of bottoming. For a resumption of an up-trend, we will all have to wait awhile.

There are three disciplines of analytics that I use. They are weighted fundamental (40%), technical (35%) and consensus opinion 35%). Note my rankings of these three companies and my disciplines in the bottom table. Within these disciplines, I also focus on a process of comparative analytics. This process is simple, it one of the separating the wheat from the chaff, so to speak. Comparing each of the Nasdaq 100 component companies make that work rather easy. It is a matter of doing just 100 fundamental valuations, technical and consensus opinion reviews. These three companies are simple at or near the bottom of my most-recent list.

I also selected these companies because I believe the marketplace is in and has been moving into a bearish cycle. See my comments on the General Market.

These companies are a mix of sectors and industry groups. At this time, they are not candidates for buying or short selling. That advice is reserved for my clients and specific followers.

The earnings estimates are not projected as positive. Longer-term earnings growth is declining for the foreseeable future. Valuations are average and likely not to improve for a quarter or more. Remember that the way the "Street" will reward or punish any company in the future is always questionable. It appears, according to comparative analytics, that the upside is quite limited (see my valuations for each below).

Accurate comparison of many companies with these three companies with their peers is what makes or loses you money. The best valuations will always out perform the lower valuations. Timely news for each company has been checked, and does not support holding or buying these companies.

As a major index, the Nasdaq 100 currently has many other more compelling companies to own. For me, this means that the projected price, and the risk/reward ratio must be in the top 1% - 3% of my candidates for buying or in the bottom 1% - 3% of my candidates for short sales. Currently, these three companies do not meet these conditions.

Valuation Table

Company / Symbol

Approx. Current Price

Target Price % Above (+) / Below (-) Current Price

P/E

Forward P/E

PEG

Valuation Divergence (%) (One-Year Projected to a Mean) from the Next Bullish Inflection Point.

 

Apollo Group, Inc. (APOL)

$32.00

plus 6+% / minus 20+% from the recent high.

7.0

10.0

0.85

minus - 22%

Comments: This is only a good Valuation and therefore, has a modest upside Target-Price Projection. You will note that the downside Target Price is much greater. The Valuation Divergence is negative. There are problems with its Technical and Consensus Analysis! I believe APOL is amongst the weaker Nasdaq 100 companies in the coming months. Remember, cash is often a better place for your investment dollars.

 

KLA-Tencor Corp. (KLAC)

$44.00

plus 4+% / minus 18+% from the recent high.

10.1

9.2

0.89

minus - 21%

Comments: This is only a good Valuation and therefore, has a modest upside Target-Price Projection. You will note that the downside Target Price is much greater. The Valuation Divergence is negative. There are problems with its Technical and Consensus Analysis! I believe KLAC is amongst the weaker Nasdaq 100 companies in the coming months. Remember, cash is often a better place for your investment dollars. ( KLAC has very similar fundamental, technical and consensus opinions and thus I share the same Comment as for APOL )

 

Oracle Corp. (ORCL)

$26.00

plus 5+% / minus 16+% from the recent.

13.7

9.9

1.15

Minus - 13%

Comments: This is only a good Valuation and therefore, has a modest upside Target-Price Projection. You will note that the downside Target Price is much greater. The Valuation Divergence is negative. There are problems with its Technical and Consensus Analysis! I believe ORCL is amongst the weaker Nasdaq 100 companies in the coming months. Remember, cash is often a better place for your investment dollars. ( KLAC has very similar fundamental, technical and consensus opinions and thus I share the same Comment as for APOL )

 

(click to enlarge)Summary of My Three Disciplines:

Symbol

Fundamental (weighting 40%)

Technical (weighting 35%)

Consensus Opinion (weighting 25%)

APOL

Good

Good, but deteriorating

Good

KLAC

Good

Good, but deteriorating

Good

ORCL

Good

Good, but deteriorating

Good

Market Status

I use several indices in my focus to identify the on-going bullish and bearish inflection points. The NY and Nasdaq Composite Indexes are represented very well by the NY - SPDR S&P 500 (SPY) and Proshares Short S&P 500 ETF (SH) and the Nasdaq - PowerShares Trust ETF (QQQ) and Proshares Short (PSQ). In today's marketplace, accurate inflection point analysis / identification is critical for profitable investing in your on-going research. Because of the dynamics of the marketplace, I also emphasize and use market breadth indices. 'Breadth' does not have a tracking ETF; therefore, I have created my own excel charts.

Further support for my guidance for the general market can be read in my Instablog article on "Wednesday - General Market Update & Commentary."

Summary

The above tables and chart present a clear and not-so-positive account of these three companies. You may want to consider taking short positions in these companies. I believe, the time to take a short position is often quite surgical. There are many technical tools to help investors make wise investment decisions.

This article is a warning about buying or holding these particular companies.

Conclusion

I am bearish on both the world economies and the general market. My more recent Instablog postings are focused on securities that should not be currently held in your portfolio. It is important to understand that holding cash during questionable time frames is a wise choice. We are definitely in a very "questionable" time frame!

Further and on-going support for these companies will be posted this coming Saturday. My "Saturday Update" can be read weekly in my Instablog article.

Have fun, investing wisely.

Source: 3 Nasdaq 100 Companies You Do Not Want In A Portfolio Right Now