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Overbought Stocks

|Includes:Big Lots, Inc. (BIG), GNET-OLD, INPH, MCBI, MSTR, VIAV

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

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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.”
Quick R = Quick Ratio          
Gross M = Gross Margin       
Oper M = Operating Margin
Profit M = Profit Margin


Big Lots Inc. (NYSE:BIG)


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Bloomburg notes that the discount store is looking to sell itself for about $60 per share.; 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)


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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.; 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)

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The communication networking solutions company broke through resistance on upbeat 4th quarter results.  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)


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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)


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The Texas bank reported 4th quarter net income rose 167% from 3rd quarter.  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)


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The business intelligence software company is looking a little pricey, though it has experienced high demand on its apps for the iPad.  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.