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Michael Bryant
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Investor. Mission: Help people make money. Degree: Chemistry from NC State University. Featured author of Momentum Options Weekly Wrap (http://momentumoptionstrading.com/ ) Follow me on Motley Fool Caps at http://caps.fool.com/player/modestus1.aspx . For short-term ideas about big movers, follow... More
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  • Overbought Stocks 0 comments
    Feb 14, 2011 9:26 AM | about stocks: BIG, GNET-OLD, INPH, JDSU, MCBI, MSTR

    Using an RSI greater than 90 (overbought), below is the screen for overbought stocks for February 11, 2011.

    Source:  http://finviz.com/screener.ashx          

    For each graph, top black line is overbought and bottom black line is oversold.

     

    P/S = Price/Sales                                
    P/B = Price/Book                   
    P/C = Price/Cash        
    P/FCF = Price/Free Cash Flow                                  
    EPS next Y = EPS growth next year
    EPS past 5Y = EPS growth last 5 years                    
    Insider Trans = Insider Transactions
    Sales Q/Q = Sales growth quarter over quarter
    ROA = Return on assets                                            
    ROE = Return on equity
    Curr R = Current Ratio, which “measures whether or not a firm has enough resources to pay its debts over the next 12 months.”  A ratio of 1.25 means that “for every dollar the company owes it has $1.25 available in current assets.” http://en.wikipedia.org/wiki/Current_Ratio
    Quick R = Quick Ratio          
    Gross M = Gross Margin       
    Oper M = Operating Margin
    Profit M = Profit Margin

     

    Big Lots Inc. (NYSE:BIG)

     

     
    Bloomburg notes that the discount store is looking to sell itself for about $60 per share.  www.bloomberg.com/news/2011-02-10/chipot...; Problem, many companies that do look for buyers never get a buyer or get a buyer for a lower price.  Don't bet on the hype.  This is a bad time for a merger and aquisition in the retail business.

    Price is approaching resistance and likely to fall, possibly back to support.  %K and %D and W%R are in overbought territory.  Plus, a price rise correlated with a flat or falling MFI is a bearish sign.  High price to cash (61x) and high negative insider transactions (74% selling) raise a red flag for the closeout retailer.

     

    Global Traffic Network Inc. (Pending:GNET)

     

     

    The news information company is trading for an extremely high PE (73) and PEG (3.83) for its industry.  MFI, %K and %D, and W%R are all back to the highs it set in October, as indicated by the red line.  However, this stock has momentum, so pullback may be small.  And the company formed a partnership with Clear Channel. www.bizjournals.com/sanantonio/news/2011...; This would further the hype in the stock.  But is its run up warranted?  After all, it is above its all-time high, besides the high PE and PEG noted above.

     

    Interphase Corp. (NASDAQ:INPH)

     

    The communication networking solutions company broke through resistance on upbeat 4th quarter results. http://finance.yahoo.com/news/Interphase-Announces-2010-bw-666602761.html?x=0&.v=1  Still, does a 24% rise in revenue warrant a nearly 100% rise in the stock, despite the %K and %D and the W%R are not quite overbought?  Then again, these technically usually have a one day lag.

     

    JDS Uniphase Corporation (NASDAQ:JDSU)

     

     

    The telecommunication provider also seemed to have gotten ahead of itself, having broken through resistance.  MFI, %K and %D, and W%R are overbought.  Stock has an extremely high PE (469) and PEG (34).  Jim Cramer advises viewers not to buy into a stock with a PEG above 2.  I would advise the same.

     

    Metrocorp Bancshares Inc. (NASDAQ:MCBI)

     

     

    The Texas bank reported 4th quarter net income rose 167% from 3rd quarter. http://finance.yahoo.com/news/MetroCorp-Bancshares-Inc-prnews-3292003359.html?x=0&.v=1  Stock may have gotten ahead of itself as it crossed resistance.  However, on the plus side, forward PE looks very low at 13.

     

    MicroStrategy Inc. (NASDAQ:MSTR)

     

     

    The business intelligence software company is looking a little pricey, though it has experienced high demand on its apps for the iPad. http://www.fool.com/investing/high-growth/2011/02/09/the-1-thing-ipad-and-blackberry-users-can-agree-up.aspx  Insider sales are 85%.  Why are so many insiders jumping ship?

     

    Source:  All graphs created from Yahoo Finance.




    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Themes: Overbought Stocks: BIG, GNET-OLD, INPH, JDSU, MCBI, MSTR
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