Tuesday, May 21, 2013

Gannett Co., Inc. (NYSE: GCI)

Gannett Co., Inc. operates as a media and marketing solutions company in the United States and internationally. It operates through three segments: Publishing, Digital, and Broadcasting. The Publishing Segment operates 82 U.S. daily publications with affiliated online sites, including USA TODAY, a national, general-interest daily publication; USATODAY.com; USA WEEKEND, a magazine supplement for publishing companies; Clipper magazine, a direct mail advertising magazine; magazines for nurses and allied health professionals; and military and defense publications. The Digital segment operates CareerBuilder.com, an online job site to help companies target, attract, and retain talent. The Broadcasting segment operates 23 television stations and affiliated online sites, which offer news, entertainment, and advertising content; and Captivate Network, a national news and entertainment network that delivers programming and full-motion video advertising on video screens located in elevators of office towers and hotel lobbies in North America.
To review Gannett's stock, please take a look at the 1-year chart of GCI (Gannett Co., Inc) below with my added notations:
1-year chart of GCI (Gannett Co., Inc) GCI has been working its way higher since June, but has since paused in a sideways trading range. For the last (2) months the stock has been stuck within a common pattern known as a rectangle. Rectangle patterns form when a stock gets stuck bouncing between a horizontal support and resistance. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern. GCI's rectangle pattern has formed a $22 resistance (red) and a $20 support (blue). A break above $22 would also be a new 52-week high.
The Tale of the Tape: GCI has formed a rectangle pattern. The possible long positions on the stock would be either on a pullback to $20, or on a breakout above $22. The ideal short opportunity would be on a break below $20.

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Buy These ETFs to Profit from "Sector Rotation"

Investors have been pouring a lot of money into relatively “safer” or so-called “defensive” sectors during the last few months. These sectors have also benefited from investors’ insatiable appetite for yield in the current rock-bottom interest rate environment, as most of the companies in these sectors are mature, slow-growing, dividend paying companies.

As a result, valuations of these sectors have soared and some of them look overpriced now. Defensive sectors like healthcare, staples and utilities are now trading at an average premium of more than 10%, up sharply from ~40% discount to the broader market in 2009.
On the other hand, many fast-growing sectors have largely been ignored by investors. But the trend appears to be changing now.  Fund flow trends and sector returns for the last month show that investors are slowly moving into “riskier” corners of the stock market.

Once the economic picture begins to improve, many more investors would be tempted to move to cyclical stocks. It may be the right time for investors to look at sectors with brighter longer-term growth potential, which look rather attractively priced now.
At the same time, some portfolio allocation to defensive sectors is warranted as those sectors will continue to perform well if economic recovery shows signs of slowing down.

Year to date return
1 month return
1 month flow (million)
FY 1 P/E*
Consumer Staples
*Based on forecasted fiscal year earnings, Source: SPDR website
Vanguard Information Technology ETF ( VGT - ETF report )
Launched in 1998, this is one of the largest and most liquid products in the technology ETFs space. It manages about $3 billion in assets, which are currently invested in 414 holdings. (more)
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4 turnarounds from the worst performer list

by George Putnam, editor The Turnaround Letter

George PutnamOne of our favorite places to look for turnaround candidates is a list of the worst performers in a certain segment of the market. Because investor sentiment can change very rapidly, today’s dogs often become tomorrow’s darlings, and those who are willing to go against the crowd can reap significant profits.

Among the worst performers in the S&P 500 index since the market hit its lows last June are Apple (AAPL), F5 Networks (FFIV), J.C. Penney (JCP) and Monster Beverage (MNST).

To be sure, many of these stocks carry some risk. There are, after all, reasons why they have underperformed.  But the market often overreacts to these risks, and if these companies can fix their problems, their stockholders will be very handsomely rewarded. (more)

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Chartbook: Canadian Economy Up Against Multiple Threats

On many levels an economic mean-reversion is taking place as a decade long bull-market in Canadian real estate has now stalled, coinciding with other faltering drivers of the Canadian economy. Meanwhile, the US housing market has surged 8% higher in the last year and cities such as Phoenix Arizona have risen over 25%. This recovery has emerged after a six-year US real estate drudging that has left in its wake systemically high US unemployment and a global economic dependence on central bank-sponsored stimulus.

Unlike with the US, Canadian markets are undergoing a period of price weakness; home prices in major markets of Toronto, Montreal, Vancouver, and Calgary are all lower from their all-time highs as the chart below illustrates. Notably, Canada’s three largest cities, Vancouver, Toronto, and Montreal are only into the first year of a potential lengthy period of price weakness.

However, even these early signs of weakness are significant because they are being accompanied by a systemic “drying up” of home sales volume. In some markets the volume drought has been large in magnitude. Vancouver in particular experienced April 2013 sales which were the lowest April sales since 2001, or 20.9% below the ten-year April average (Vancouver Sun). This reduction in sales volume is not just in Vancouver. The Canadian Real Estate Association (CREA) reported 90 percent of the local markets that it monitors posting year-over-year March sales declines (BNN). Why is the volume of home sales important? Sales volume contraction is often a precursor to price declines within any asset class, and particularly so in housing. We examined this fact in our previous chartbook publication by examining US housing sales volume changes leading up to the US housing crash (Chartbook Dec 2012).
Chart 1)-new
Canadian housing price drop
Click Here to view a larger version of this diagram
In addition to the sales volume drought, average home prices are also exhibiting weaknesses. In Vancouver, widely considered Canada’s “bubbliest” city, average single family home sale prices are down over 14% from their highs and average condo prices are close to 2007 levels (Brian Ripley’s CHPC).
The decade long shift in leadership between Canadian and US housing prices is best observed through our charts on relative US/Canadian housing markets (Section D– chart library). Canadian markets of Vancouver, Toronto, and Montreal have now all reversed bullish trends versus US markets which had been in place since December of 2005 (See Vancouver Chart below). The only major exception is Calgary, where home prices have continued their sideways move relative to US home prices which began in 2009. (more)

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Massive 55% drop seen in gold exploration – IntierraRMG

mineweb.com / By Lawrence Williams / May 20, 2013
With the recent weakness in metals prices – and in particular for gold – exploration activity has seen a big decline with precious metals the major affected sector.
According to a new State of the Market report from research firm IntierraRMG, slumping metals prices, and falling equity valuations, reflect serious uncertainty about the world economy. The recent quarter ended with the Governor of the Bank of Japan announcing a huge monetary stimulus, Europe bailing out the banking system in Cyprus, disappointing employment figures in the USA and worrying signs of a slowdown in the crucial Chinese economy. The depressing economic scenario of the past couple of years has had a serious knock-on effect over the minerals exploration sector.
Exploration activity has been trending down since the end of October 2011, the report notes, and IntierraRMG monitored drilling reports from only 355 prospects followed in March this year. Gold exploration has been particularly weak, with activity reported from just 172 prospects in March, compared with 382 a year earlier – a fall of close on 55%.
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Chart of the Day - Legg Mason (LM)

The Chart of the Day is Legg Mason (LM).  Lately the stock has terrific momentum and was up in all of the last 20 trading sessions.  The stock gained 47.89% in the last 12 months and still has a P/E below the market average.  We found the stock by sorting the New High list for frequency.

It is a holding company which, through its subsidiaries, is principally engaged in providing asset management, securities brokerage,investment banking and related financial services to individuals,institutions, corporations and municipalities.

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Gold and Gold Stocks, Part One – Technical Overview

Still No Joy in Gold-Land
Below is a brief technical overview in view of last week’s action in the gold sector. Gold stocks have continued to lead to the downside, something they have done throughout the bear phase to date. Thus the HUI index ended the week at a new low for the move, below the lows put in concurrently with gold’s crash low in mid April. This obviously constitutes a technical divergence, but such divergences have as a rule been a sign that still more declines lay ahead. It would be different if the divergence ran the other way around – i.e., if a new low in gold and silver concurrently with a higher low in the mining stocks were to occur. That would constitute a bullish divergence. That said, a few things argue in favor of the idea that at least a dead-cat bounce could be close at hand (famous last words).
On the daily and weekly chart of the HUI, there is now a price/RSI divergence. Moreover, the daily chart shows a close well outside the lower Bollinger band (unfortunately the bands are widening as well, which is usually a bad sign). In short, the decline happened so fast that momentum oscillators have failed to keep pace with it. The weekly HUI chart remains close to the most oversold RSI reading in all of history (the record was set in April).
Speaking about sad records, the HUI is now 164.55 points below its 200 day moving average, or more than 40% (!). If it had moved above its 200 dma by a similar percentage in the course of a rally, we’d call it an unsustainable bubble. So maybe it is an unsustainable anti-bubble. In any event, this also argues in favor of at least a dead cat bounce being near.
Gold and the HUI (green line below the main chart) diverge again – but not in a good way. Note also the new MACD sell signal for gold
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Incredibly Important Developments In Gold & Silver Markets

Today King World News is reporting on incredibly important developments taking place in the gold and silver markets.  Acclaimed commodity trader Dan Norcini spoke with KWN about the amazing action in both of these key markets and provided four tremendous charts.  Below is what Norcini had to say in his interview.    (more)

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