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Named one of the top independent analysts in the country by Business Week Magazine in their expose entitled, "Analysts That Get It", Mr. Lane is the founder and lead architect behind FusionIQ, a proprietary software platform which fuses a variety of technical and fundamental... More
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  • Barron's Through The Prism Of FusionIQ - AMAT

    In a Barron's piece on Applied Materials (NASDAQ:AMAT), Teresa Rivas summarizes their view as follows: "In upgrading shares of Applied Materials, JPMorgan argues that the maker of semiconductor-manufacturing tools could deliver substantial gains. We agree."

    Here, we look the shares of AMAT from the technical perspective of FusionIQ, the industry's leading quantitative stock ranking software, after excerpting key components of the Barron's piece. First, Barron's view …

    On Monday, analyst Harlan Sur boosted his rating on Applied Materials to Overweight from Neutral, and raised his price-target to $30 from $19. With shares up 0.5% to $22.92 Monday afternoon, investors can expect more than 30% upside. Sur wrote that the upgrade was predicated on Applied Materials' solid position in the semiconductor-equipment market, his optimism about the current spending cycle, improving confidence about the company's merger with Tokyo Electron, and what he believes will be "the unlocking of significant earning power potential in fiscal years 2016 and 2017."

    Applied Materials' acquisition of Tokyo Electron is expected to close before the end of the year and should bring long-term advantages to the company, in addition to cost-saving synergies and margin expansion.

    Last month, S&P Capital IQ's Angelo Zino upgraded Applied Materials from Hold to Strong Buy, arguing that investors continue to undervalue the earnings potential of the combined company. "We see operating EPS north of $2 per share within three years from a combination of the two semiconductor equipment titans." Panelist Brian Rogers reiterated his bullish stance on the stock last month arguing that Applied Materials would begin to repurchase shares after its Tokyo Electron acquisition is completed. At 17 times forward earnings, Applied Materials doesn't look pricey given that earnings are expected to surge near 80% this fiscal year and 27% the next.

    Barron's subscribers can access the entire piece by clicking here.

    As illustrated in the monthly chart below, AMAT shares eclipsed resistance in the $18.00 - $18.50 area (red lines) back in February, clearing its first resistance hurdle. Subsequently, shares have rallied up to their next resistance hurdle (green lines) in the $23.50 - $ 24.00 region. Some consolidation or pullback may be in order over the near run, seeing this is the first attempt to overtake this level. However, if this level can be cleared we could see shares rallying up to its next level resistance near $ 30.00 (gold line)

    (click to enlarge)

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: AMAT
    Jul 08 12:58 PM | Link | Comment!
  • Strong Growth & Technicals ...

    In this week's installment of FusionIQ Screen Pass we take a look at companies that have a consistency of solid top line revenue growth coupled with strong FusionIQ technical readings.

    It's a very select list with only 12 companies making the grade. Illustrated in the table below are those select companies. Created with FusionIQ's powerful custom screener, this screen scans for companies that have a high FusionIQ master technical score (ETech) of 70 or >, a high short-term trend score (ESTPMI) of 80 or >, a New FusionIQ BUY signal within the last 5 days (LSIG), a price between $5 - $100 (PRICE) and a 5 year average revenue growth rate (5YGR) of at least 20 %.

    On the list are: Nuverra Environmental (NYSE:NES), Emerald Oil (EQX), Arc Group Worldwide (NASDAQ:ARCW), Express-1 Expedited Solutions (NYSE:XPO), Concord Medical Services (NYSE:CCM), Cognixant Technology Solutions (NASDAQ:CTSH), Kandi Technologies (NASDAQ:KNDI), Main Street Capital Corp (NYSE:MAIN), Grand Canyon Education (NASDAQ:LOPE), Depomed Inc. (NASDAQ:DEPO), Patrick Industries (NASDAQ:PATK) and Canadian Solar (NASDAQ:CSIQ).

    Disclosure: The author is long ARCW.

    Jul 01 4:12 PM | Link | Comment!
  • Barron's Through The Prism Of FusionIQ - International Paper (IP)

    Sandra Ward's weekend piece on International Paper is summarized a follows: "International Paper is ramping up payouts and stock buybacks. Shares could rise 40% and a 2.9% dividend." Here, we excerpt a few key parts of the Barron's article before providing our technical view on the stock (NYSE:IP) from the perspective of FusionIQ, the industry's leading quantitative stock and ETF ranking tool.

    First, Barron's views ...International Paper (IP) expects to produce about $1.5 billion in free cash this year and $2 billion next year, after funding pension obligations. That's up from about $400 million a year before the company bought Weyerhaeuser's packaging operations in 2008; it then acquired rival Temple-Inland in 2012. With the debt from those acquisitions now paid down to a comfortable level, the company is turning its attentions to returning more capital to shareholders.

    The company's shares have been under pressure from unusual factors, from a weak ruble to bad weather, but the company looks poised to regain momentum as it continues to improve operations, expand margins, and use its enormous free cash flow for dividend increases and share buybacks. The combination of improving fundamentals and the return of cash to shareholders should translate into a higher stock valuation and outstanding total return for shareholders.

    Some on Wall Street see the shares rising as high as $66 to $70 a share-as much as 43% higher-in the next 12 months, as strong demand leads to tighter supplies in the containerboard market, eventually leading to rising prices and substantial earnings growth. "We're very positive on the stock," says Philip Ng, analyst at Jefferies Group. "It's a cheap stock; the fundamentals have bottomed; it's generating a ton of cash flow; and it's a play on the recovering U.S. economy."

    International Paper will get $400 million from the Veritiv transaction, which, along with IP's estimated $1.5 billion in free cash from operations this year, can go to buy back shares and continue to increase the dividend payout. (The company has $8.9 billion in debt, which is manageable at three times Ebitda.) IP has bought back more than $1 billion of its shares since it authorized the $1.5 billion program last September, well ahead of what it thought would be a two- to three-year time frame. It hiked its dividend in September by 17%, to $1.40 a share annually. The stock has a dividend yield of 2.9%.

    Here's how the shares look to us at FusionIQ .... As illustrated in the monthly chart below, IP shares are in the middle of a 15 month consolidation (orange lines). Given the trend prior to the consolidation was bullish, this current trading action appears to be a pause before a renewed up trend. That said a close this month, or next, above $50 would confirm the breakout. The upside target on the breakout would be the size of the move just prior to the consolidation (green arrows), giving us a potential upside target of $ 65.

    (click to enlarge)

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: IP, Cyclicals
    Jun 30 11:46 AM | Link | Comment!
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