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