Wednesday, June 3, 2015

Alcoa (NYSE: AA)

I've been scratching my head a bit on this one. It ran from $8 a share in 2013 to a 2014 high above $17. It has since pulled back to ~$12.50, a 52-week low.
But the thing is, the prospects look great for Alcoa. The company has been transitioning from a bulk aluminum producer to a value-added producer of finished products. A couple key acquisitions in the aerospace sector have made it a major supplier for Boeing. And Boeing is going great guns with its new line of planes.
Alcoa is also a critical supplier for Ford's new aluminum-bodied trucks. All indications are that this truck is being very well received. Other car companies will follow Ford's success, as adding more aluminum lowers overall weight and improves performance and gas mileage.
Alcoa has beaten earnings expectations in each of the last four quarters, yet analysts still will not raise forward estimates. With a forward P/E of 10 and a high probability that it will continue to beat earnings expectations, Alcoa should trade between $18 and $20 by the end of the year.

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Trade of the Day: Time to Book Profits in ADI Stock?

Analog Devices, Inc. (NASDAQ:ADI) — This semiconductor company manufactures high-performance integrated circuits used in analog and digital signal processing applications.
On Feb. 23, I recommended traders buy ADI stock on a pullback to $57.50 with a trading target of $65. The stock hit a low of $57.45 on March 6, followed by a low of $56.27 on March 26. From there, ADI stock reversed on huge volume from just below its 50-day moving average.
With my trading target exceeded, those who followed my advice are looking at a more than 18% profit in just over three months.  (more)

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Gold And Silver Charts For June 2015

The chart notes indicate a greater likelihood for another dollar rally higher, and an additional reason comes from the base out of which this fiat paper currency has rallied.  You can see how the “dollar” index has been in a base trading range (TR) since 2006, on this chart, and said base provides the impetus to carry price much higher than has developed, to date.
The net results of the chart comments is to expect more backing and filling, and we are of the mind that higher fiat prices may been seen, at least until the charts indicate otherwise. (more)
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Cowen Group (NASDAQ: COWN)

Cowen is a small investment bank and brokerage company. Trailing 12-month revenue was $376 million. And it's expected to do ~$394 million for fiscal 2016.
For the last two quarters, it has trounced earnings expectations, reporting $0.16 and $0.20 a share against expectations of $0.11 and $0.14, respectively. Analysts have since pushed estimates higher, but the stock hasn't really moved, as the overall market has been range-bound.
The valuation looks good: trailing P/E is 5, forward P/E is 8.5, and it trades just below book value. Cowen has a net $500 million in cash, and the market cap is $1.3 billion.
Cowen was a $20 stock back in 2007. It's around $6 now, and it's just breaking out to post-financial crisis highs. The stock has rallied ~25% since November 2014.
I wouldn't be shocked to see Cowen shares pull back 10%, and I also wouldn't be surprised to see it run another 60% to $10 over the next six months.

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