Tuesday, April 26, 2016

Apple earnings disappointment no surprise:

At the close April 26, 2016 the shares of Apple Inc. closed at about $104 and after the close the business media lead with, “Apple's revenue falls for first time in 13 years” To the technical analyst who looks at very long term charts – today was no surprise so let us re-visit a post of last June 2015 - with the original chart, and I quote.

“I see Apple Inc as built a triple top on a point & figure chart. I love P&F charts because most of the squiggly line guys never use them.

Apple Inc was added to the DJII March 2015 suggesting that Apple is in transition from a growth stock to a value stock. In other words – the great 2001 – 2015 growth period may be over. Some past DJII growth to value stocks - Cisco Systems added in June 2009. Bank of America and Chevron added in February 2008, Intel and Microsoft were added in November 1999

Honeywell was dropped from the Dow in February 2008 and has doubled in price – now a true growth winner – Alcoa also doubled in price after being dropped in September 2013

Our chart – monthly of Apple Inc displays the progressively shorter growth periods – this may cause some momentum loss in the broader technology sector

Monday, April 25, 2016

Street consensus and Buy. Hold and Sell:

Torstar (TS.B) seems to be a value trap at the moment. They are sitting on a lot of cash – companies sitting on cash are usually bad investments. They are tying to go digital, the publisher is leaving, the shares are trading at multi-year lows and out of the 5 analysts that cover the company – all 5 have a “Hold” rating on the stock.  Again - we all know that a “hold” rating means they just don’t know.

One BNN contributor recently said – “Torstar is stupid cheap,”

So there are a lot of negatives – we have a shrinking business with no analyst support and a fundament guy thinks the stock is “cheap”. Cheap to me means cheap because nobody wants to own the shares. I bought some Torstar stock last week because of all the fundamental negatives – and the one technical positive – a bounce of the recent lows on a big (for Torstsr) volume increase. Thanks to Stockcharts.com for the CandleGlance plot of Torstar.

Friday, April 22, 2016

More on the value of street consensus:

According to The Wall Street Journal – April 21, 2016 the Analyst Ratings on the TSX listed Alimentation Couche-Tard Inc (ATD.A) was currently 11 buys, 2 holds and no sells. Three months ago it was 12 buys, 2 holds and no sells. We all know that a “hold” means they just don’t know.

A few posts ago I observed that on BNN’s popular Market Call shows there was a growing tendency for the callers to ask the host for the “street consensus” in addition to the guest opinion on a particular company. The problem is the street consensus is usually a “buy”, a “hold” and rarely a “sell”.

One Market Call guest correctly described Couche-Tard to be “One of the darlings of the TSX via growth by acquisition.”

The fundamentals I see are based on common sense – first the stock was over loved and over-owned and secondly when you grow by acquisition – each one has to be bigger in order to propel the growth story..(sort of like the Valeant story)

Technically the “B” shares are trading below both the 50 and 200 day simple moving averages, the stock is underperforming the TSX Comp and the S&P500 and the point & figure has peaked and the down O’s sit on key support at $55

Our weekly bar chart of Couche-Tard spanning about 100 weeks displays the relative perform vs. the TSX Comp and Couche-Tard’s 40-week moving average. Clearly the street consensus and the technical picture do not agree.