Monday, September 24, 2012

Crocs, Inc. (NASDAQ: CROX)

Crocs, Inc is a designer, manufacturer and distributor of footwear and accessories for men, women and children. At year-end 2011, Crocs sold its products in more than 90 countries through domestic and international retailers and distributors and directly to end-user consumers through its company-operated retail stores, outlets, kiosks and web stores. It also offers accessories and apparel, which generated approximately 3.7% of its total revenues during the year 2011. Its footwear products are divided into four product offerings: Core-Comfort, Active, Casual and Style. The Core product offering primarily includes molded products that are derivatives of the original Crocs Classic designs. The Active product offering includes sport inspired products and footwear suited for activities, such as boating, walking, hiking and even recovery after workouts. The Casual product offering includes sporty and relaxed styles. The Style product offering includes stylish products.

To analyze Croc's stock for potential trading opportunities, please take a look at the 1-year chart of CROX (Crocs, Inc.) below with my added notations:

1-year chart of CROX (Crocs, Inc.)

CROX interests me because of the one simple price level at $18. Not only can you see the $18 support (green), but $18 has also been a common resistance (red) as well. So, the $18 price is key to this stock. If you are bearish, you might short CROX on any rallies up to $18. However, if you're bullish on the stock you would want to see the stock break through the $18 resistance.

4 Graham-Buffett style stocks

by J. Royden Ward, editor Cabot Benjamin Graham Value Letter

J. Royden WardBenjamin Graham has been recognized for decades as the father of value investing. Warren Buffett was a student of Graham at Columbia University and later worked for Mr. Graham for several years.

For our latest special report, I combine Warren Buffett’s and Ben Graham’s criteria for choosing stocks; here, we look at four high-quality companies that fit our criteria.

To find these Graham-Buffett style investment opportunities, I looked for stocks with:
  1. Free cash flow more than $20 million.
  2. Net profit margin more than 15%.
  3. Return on equity more than 15%.
  4. Discounted cash flow value higher than current price.
  5. Market capitalization more than $1 billion.
  6. Standard & Poor’s rating of B+ or better.
  7. Positive earnings growth during the past five years with no deficits.
  8. Dividends currently paid.
These stocks sell at sensible prices, offer reasonable appreciation potential and provide solid dividends. I am confident these high-quality stocks will fare very well during the next six months.(more)

Vera Bradley, Inc. (NASDAQ: VRA)

Vera Bradley, Inc., through its subsidiary, Vera Bradley Designs, Inc., engages in the design, production, marketing, and retail of stylish and functional accessories for women under the Vera Bradley brand. Its products include a range of handbags, accessories, and travel and leisure items. The company sells its products to specialty retailers primarily in the United States, as well as to national retailers and third party e-commerce sites. As of January 28, 2012, it sold its products directly through 48 full-price stores and 8 outlet stores in the United States; 7 pop-up stores in Japan; Websites, including and; and an annual outlet sale in Fort Wayne, Indiana. The company was founded in 1982 and is headquartered in Fort Wayne, Indiana.

To review Vera's stock for potential trading opportunities, please take a look at the 1-year chart of VRA (Vera Bradley, Inc.) below with my added notations:

1-year chart of VRA (Vera Bradley, Inc.)

VRA had been trending lower since October of last year and appears to have bottomed out in June. Over the last (4) months the stock has established two important price levels worth watching: The $20 support level (blue) and the common resistance level (red) at $25. The stock is currently sitting right below its resistance.

REIT’s Consolidation Supported by 3 Buy Signals

Home Properties (NYSE:HME) — This real estate investment trust (REIT) engages in the ownership, operation, acquisition, development and rehabilitation of apartment communities in the United States. The stock has been in a bull market since March 2009, progressing higher despite a ragged real estate market.
Currently, the stock is consolidating in a bull channel and is supported by three buy signals from our proprietary indicator, the Collins-Bollinger-Reversal (CBR). The recent consolidation is at $63. If that price is broken, look for support at the 200-day moving average at just above $60.
S&P and Wunderlich Securities reiterated their “buy” ratings on HME with a price target of $69 and $70, respectively. Technically the stock is trading on the support line of the bull channel with a target of $69, the top of the channel. HME has a dividend yield of 4%.
Trade of the Day – Home Properties (NYSE:HME)
Click to Enlarge

New Moon Top Holding…Barely

A little chart potpourri tonight. 5 charts that stood out to me.

13653 is the high of the day on the New Moon last Friday. So far that top is holding but with a quiet consolidation during an options expiration week, the bulls may have a crack at that resistance tomorrow. Futures are mildly up as I type this and this week’s pullback looks textbook with the big money holding their positions. If we break through that level with force we could be in for a nice rally tomorrow or next week.

If I was bearish I’d point to this massive bearish ascending wedge on Nasdaq. But that was only if I was bearish. Pay no attention to the man behind the curtain…whose name is Benjamin.

Horrid action on the transports today…but like I said on twitterthis is so last century. Does anybody really pay attention to this index anymore?

Pick a bearish pattern, and then stick a fork in bonds.
  • bearish head and shoulders with a break and a retest to the neckline – money favors lows
  • down-trending channel which is a little less ominous, but $125 should be a top if that’s it.

As above, so below.

The Single Best Way to Make Money in Natural Resources

Where are the best opportunities right now in natural resources?

The obvious answer is the companies that are digging the stuff out of the ground.

But to find tomorrow's next big winners, you also have to look at what's hated.

For example, no other natural resource has been shunned during the past few years quite like natural gas. Prices have rebounded sharply since April, but that's nothing compared with where prices were before.

Shares of high-quality producers have barely responded -- but that type of disconnect is always resolved in time.

Most industry execs say natural gas will need to hit at least $5 per thousand cubic feet (Mcf) before they start revamping their budgets and directing more drilling rigs and resources back into gas fields such as the Haynesville Shale.

So we've got a long way to go before the industry turns up the production faucet.
But if gas reaches $5 per Mcf, then cash flows should explode for low-cost producers like Ultra Petroleum (NYSE: UPL). The company can turn a profit with gas as low as $2.88 per Mcf -- and it has 5 trillion cubic feet of reserves waiting to be sold.  (more)

Nat Gas Consolidating Ahead of Another Upleg

Increasingly, nearby natural gas futures appear to be consolidating their April-July gains (1.902 to 3.277) between 2.60/70 on the low side and 3.00/20 on the high side.  My work considers this to be a sideways digestion area in preparation for the next recovery upleg that projects to 3.40/50 and then to 3.90-4.00.
That said, natural gas must hurdle and sustain above its most recent rally peak at 3.070 in order to unleash the buying power to propel prices to the above-mentioned targets.

US Weekly Economic Calendar

time (et) report period Actual forecast previous
  None scheduled        
9 am Case-Shiller home price index July   -- 2.3%
10 am Consumer confidence index Sept.   65.0 60.6
10 am FHFA home price index July   -- 0.7%
10 am New  home sales Aug.   380,000 372,000
8:30 am Weekly jobless claims 9-22   375,000 382,000
8:30 am Durable goods orders Aug.   -5.3% 4.1%
8:30 am GDP Q2   1.7% 1.7%
10 am Pending home sales index Aug.   -- 2.4%
8:30 am Personal income Aug.
0.2% 0.3%
8:30 am Consumer spending Aug.   0.5% 0.4%
8:30 am Core PCE price index Aug.   0.1% 0.0%
9:45 am Chicago PMI Sept.   -- 53.0
9:55 am UMich consumer sentiment index Sept.   79.5 79.2