Archives

Stocks Overcome Weak Start, Post Respectable Gains

Stocks posted decent gains Thursday after shaking off a weak start. The Nasdaq tacked on 0.4% while the S&P 500 added 0.6%. The Dow Jones industrial average surged 1.3%, mostly thanks to Visa’s (V) 10% gain. The IBD 50 rose 0.7%. Volume fell across the board. With the market in a confirmed uptrend, individual investors should be looking for stocks to buy or positions to expand. They also …

The Big Picture is a subscriber feature. Take a free trial now to get instant access.

Try the Digital + Weekly Print Combo and enjoy the best of both worlds!
eIBD is available after market close to give you a head start on the next day’s market action. Plus, you get the Weekly Special print edition delivered right to your home or office!

Enter in your information (* Required fields)

Stock Mutual Funds: Outflow Resumed In September

Investors turned tail on bond funds in September, yanking $20.3 billion from their portfolios, and became net sellers of stock funds to the tune of $5.37 billion.

That was the first outflow from bond mutual funds since $20.29 billion in December 2013, and swung from inflow of $4.35 billion in August. The September outflow amounted to a third of the $64.5 billion that had flowed in from January through August.

In September, investors fretted about fresh signs that the Federal Reserve would end its quantitative easing bond-buying program and start nudging interest rates higher. The former came to pass this week, while the latter is still nowhere in sight.

The yield curve steepened in September, with yield on two-year notes rising 10 basis points to 0.579% and 10-year notes’ rates rising 17 basis points to 2.52%.

Taxable bond funds gave back $23.32 billion vs. August’s $1.09 billion inflow. Investors put $3.01 billion into municipal bond funds vs. August’s $3.26 billion inflow.

Year-to-date bond funds pulled in $45.39 billion vs. a $27.32 billion outflow in the year-earlier period.

Stock funds’ inflow streak ended at one month as the stock market fell in September.

It was a reversal from the $1.18 billion outflow in August, according to the Investment Company Institute. There were signs of net inflow returning this month.

Funds that invest primarily in the U.S. disgorged $13.5 billion in September. Investors pulled $6.51 billon in August. In September, the S&P 500 fell 1.55%.

Stock funds that invest primarily overseas took in $8.14 billion from investors in September vs. $7.69 billion the month before. During the month, the MSCI EAFE index fell 3.99%, while the dollar rose 3.93%.

For the year to date, stock funds grabbed $46.48 billion vs. $116.80 billion in the year-earlier period.

Hybrid funds, which invest in both stocks and bonds, had inflow of $1.87 billion vs. $1.89 billion the previous month. For the year to date, hybrid funds took in $31.9 billion vs. $64.26 billion a year earlier.

Money market funds, which often have wide swings in flows, saw inflow of $22.49 billion in September vs. August’s $36.06 billion.

Fund assets fell by $302.97 billion, or 1.9%, to $15.54 trillion from $15.84 trillion the month before. They stood at $14.31 trillion a year earlier.

Stock fund assets fell $253.9 billion, or 3%, to $8.138 trillion from $8.392 trillion the prior month. They were $7.132 trillion a year earlier.

Early indications were that inflow returned in October. TrimTabs estimated stock fund inflow at $7.2 billion. It’d put September outflow at $10.9 billion.

Waste Management Hits 15-Year High As Profit Beats

Waste Management (NYSE:WM) doesn’t just take out the garbage — it also produces energy that could power your home.

The Houston-based company converts waste into renewable energy using the methane created by decomposed organic material in its landfills. Last year, it produced 9.82 million megawatt hours of energy, vs. the 9.25 million created by the U.S. solar industry.

The garbage hauler on Wednesday reported Q3 adjusted earnings of 72 cents a share, up 11% from last year and 4 cents above views. Revenue slipped 1% to $3.61 billion, missing forecasts for $3.66 billion.

Waste Management expects to earn 60 cents a share in Q4, in line with the consensus estimate. It raised its full-year guidance by 6 cents to $2.41, above Wall Street views for $2.37.

Annual earnings fell 3% in 2012 but bounced back last year with a 3% gain. Analysts expect profit to jump 10% this year, followed by an 8% increase in 2015. The stock owns a three-year and five-year Earnings Stability Factor of 3 and 2, respectively, on a scale of 0 (least volatile) to 99 (most volatile).

Earlier this month, Waste Management said it is acquiring Deffenbaugh Disposal, a privately owned trash hauler based in Kansas City, Kan. Financial terms weren’t disclosed. The purchase allows the buyer to expand in Arkansas, Kansas, Missouri and Nebraska.

Waste Management is already the biggest refuse firm in the U.S., with a market cap of $22.7 billion.

Waste Management pays a quarterly dividend of 37.5 cents a share. That works out to an annualized yield of about 3%, better than the S&P 500′s 1.9% average. The company has steadily increased its dividend each year since 2004, when it started quarterly payouts.

The stock rose 2% Thursday to a 15-year high in above-average volume. Shares are up 9% from a 44.60 cup-with-handle buy point cleared in late May.

Salix’s Chart Showing Better Action After Sell Signal

Salix Pharmaceuticals (SLXP) is showing improved action after triggering a sell signal earlier this month. But it still has hurdles ahead. On Oct. 8, the stock erased a 22% gain past a 141.91 buy point from a flat base. The stock broke out following reports of it being a potential buyout target of Allergan (AGN), which was fighting a hostile takeover from Valeant Pharmaceuticals (VRX). Salix has …

Sector Leaders Review is a subscriber feature. Take a free trial now to get instant access.

Try the Digital + Weekly Print Combo and enjoy the best of both worlds!
eIBD is available after market close to give you a head start on the next day’s market action. Plus, you get the Weekly Special print edition delivered right to your home or office!

Enter in your information (* Required fields)

Inside Your Weekly Review: Stocks Show Better Action

This week’s Your Weekly Review column is reflecting good market vibes since the Nasdaq composite followed through on Oct. 21.
How so? For starters, it’s nice to see the list expand back to more than 120 names only a week after the Oct. 21 follow-thr…

Yield Curve Near 2-Yr. Low On Fed, Low-Inflation Views

The difference between yields on U.S. two- and 30-year debt narrowed to almost the lowest level since November 2012 on speculation the Federal Reserve will raise interest rates next year while inflation remains restrained.
Treasuries rallied as invest…

Plethora Of Breakouts As Rally Gains Steam

As the rally that began Oct. 15 and followed through Oct. 21 gains traction, the number of stocks breaking out and hitting new 52-week highs Thursday grows. Vistaprint (VPRT) soared nearly 18% after reporting better-than-expected earnings. Q1 EPS came in at 86 cents, an 87% increase over a year ago. Analysts were forecasting 57 cents. Revenue increased 21% to $333.9 million. The company provides …

New Highs is a subscriber feature. Take a free trial now to get instant access.

Try the Digital + Weekly Print Combo and enjoy the best of both worlds!
eIBD is available after market close to give you a head start on the next day’s market action. Plus, you get the Weekly Special print edition delivered right to your home or office!

Enter in your information (* Required fields)

Stocks Add To Gains; Visa, MasterCard Charge Higher

Stocks continued to stretch gains in afternoon trading Thursday after shaking off early weakness.
The Dow led major indices, rising 1.3%. The Nasdaq added 0.4% and the S&P 500 climbed 0.7%. Volume was tracking slightly lower across the board in …

Stocks Improve In Afternoon Trading; Taser Surges On Earnings

Stocks improved Thursday afternoon as the Nasdaq entered positive territory, but just barely.
The Dow Jones industrial average continued to lead, with a 0.9% gain. Visa (NYSE:V), which reported better-than-expected earnings Wednesday, was the Dow’s …

Will Business Services Outsourcing Firm TriNet Group Manage A Successful Breakout?

IBD Stock Analysis – TriNet Group

IBD Stock Analysis – TriNet Group

Can business services outsourcing firm TriNet Group manage a successful breakout?

600×450

640 x 480

ISA

444 kb/s

T4M50S

flv

Flash

2014-10-30T10:59:00

Today we’ll look at TriNet Group (TNET), which went public in March.

They help small and midsize companies manage the administrative side of their businesses, such as payroll, human resources, health insurance and retirement plans.

Earlier this month, the California-based firm announced the launch of TriNet Hire, a complete hiring and recruiting solution for small and medium-sized businesses.

As the IPO Analysis noted this week, it’s getting harder and more time-consuming for smaller firms to stay in compliance with the growing number of regulations, and that’s driving demand for TriNet and similar companies.

Key Fundamentals

Although sales growth has edged slightly lower in recent quarters, TriNet’s revenue gains have come in between 44% and 83% over the last eight reports.

Earnings growth has been more sporadic, but the company posted a solid 50% rise in Q2.

TriNet is scheduled to report third quarter numbers on Nov. 4.

For the full year, analysts see EPS growth of 474%, followed by a more modest 25% gain in 2015.

The stock’s Commercial Services — Outsourcing industry group is ranked No. 22 among the 197 groups IBD tracks. That’s up from No. 108 just six weeks ago.

Overall, the stock earns a 92 Composite Rating and a B+ Accumulation/Distribution Rating, indicating moderate institutional buying over the last 13 weeks.

Other signs of demand include the stock’s 1.6 Up/Down Volume Ratio, and the rising number of funds that own shares. Plus, one typically better-performing fund has a stake in TriNet: T Rowe Price New Horizons (PRNHX).

Chart Analysis

After going public in March, TriNet rose steadily until it began forming a cup-shaped base in June. The right side of the pattern was fairly sharp and somewhat V-shaped, rather than smooth and round. Such formations have a higher likelihood of failing and that’s what happened with TriNet.

The stock broke out in August, but quickly pulled back to form a new consolidation. The current pattern has more of the smooth, rounded shaped you prefer to see in a cup.

On Sept. 12, TriNet priced a public offering of 12 million shares of common stock at $25.50 a share. That caused volume to soar 1,684% above average for the week.

The stock is now back above its 10-week line, and its Relative Strength line has been trending higher.

If TriNet does not form a handle, the ideal buy point would be 30.06, 10 cents above the peak on the left. If it does form a handle, the buy point would be 10 cents above the peak in that handle.