Morning Matters Update

There will be no Madison Letter and Market Crash Indicators today due to vacation. Both will appear on Monday. We remain with our new long position in The Madison Letter. Maintain the existing allocation to SPY in Market Crash Indicators. Enjoy the weekend.

 

Foot Locker (FL)

Foot Locker (FL) beat estimates by $0.09 with earnings of $0.63 versus estimates of $0.54. The stock has just broken out to a new 52 week high. However, the stock has moved now about its price target and upper limit. If you own this name, then we would consider locking in gains today.

fl

The Speech

Today is all about Federal Reserve Chairman Janet Yellen and what she will or will not say when she speaks at the Jackson Hole Conference. Personally, I think too much is being made about this speech.

The reason it has become such a big deal as Federal Reserve Chairman Bernanke spurred a massive rally in August of 2010 with his Jackson Hole Speech. We note that European Central Bank President Mario Draghi will speak as well today.

Jackson Hole Preview

 

Retracements & Other Considerations

We have been highlighting the retracements in the Russell 2000 and IWM since the July high. The Russell 2000 is still below its March high meanwhile the S&P 500 keeps on ripping away.

 1

Through yesterday’s close the Russell 2000 has now almost moved back above all its retracements from from the May low to the July high which was also the March high. Pay attention to 115.44 which is the 38.2% retracement on IWM.

Lowe’s (LOW)

Lowe’s (LOW) has had a big run to the upside. The company beat estimates by $0.01. However, its price target is less than $1 away from yesterday’s close. We are not a fan of this name as a result.

Company Information

Company: LOWE’S COMPANIES INC
Sector: Consumer Discretionary
Industry: Home Improvement Retail
Market Cap: $50,589 (Millions)

Targets

Price %Gain
Current Price $48.18
Price Target $52.49 9.0%
Upper Bound $59.32 23.1%
Lower Bound $46.45 -3.6%

Fundamental Variables

P/E Ratio 16.5
Sales Growth 2.3%

Valuation Variables

Past Current Future
Profitability (CFROI) 5.2% 7.4% 5.1%
Growth (in Assets) 8.4% 2.3% 2.3%
Color Legend
Company
Rating
Company
Rank
Excellent Top 10%
Good 11- 30%
Average 31- 70%
Fair 71- 90%
Poor Bottom 10%

Stock data last updated 21-JAN-14.

Data provided by Ativo Research LLC. All information provided “as is” for informational purposes only, not intended for trading purposes or advice. Ativo Research LLC is not liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing this page, you agree not to redistribute the information found herein.

Merger Activity Up Mid Week

Mergers and acquisitions are fast and furious. This morning Bloomberg has a story that Infineon is looking to acquire a U.S. semiconductor company and that the deal could occur as soon as today.

Infineon

 

Portfolio Update

The S&P 500 rebounded higher since our last update. The Nasdaq Composite rose for a third week in a row. The portfolio is now 84% invested long, 0% short and 16% in cash, net long 84%. We are now at a value of 836.05% from 815.77% since last Tuesday.

It appears a new low is in and now the S&P 500 will challenge 2000.

We have added the price target from the Alpha Intelligence Stock Scorecard into the weekly update. Most stocks are below their price targets. ETFs recommendations can be found in The Madison Letter. In 2014, this will be updated each Friday with Market Crash Indicators.

Remember these returns are total returns with the average change for all winners and losers is 7.46% per idea. Our batting average of closed winners and losers is 70%. The portfolio is up 836.05% through last week from inception when it began at 0% in April of 2008. We began 2013 at a value of 478.60% so we had a very nice gain for 2013 ending at 732.40%. So far this year we are up 103.65 points or 14.15%. The performance on the Uncommon Wisdom Daily Portfolio Tracker is a bit higher due to dividends which they add in. We have never added in dividends so our weekly results are understated.

Lazy Boy (LZB)

Lazy Boy (LZB) will report earnings after the close. Estimates are $0.21 versus $0.18. There is some nice upside to this name as it begins to recover with other housing related stocks.

Company Information

Company: LA-Z-BOY INC
Sector: Consumer Discretionary
Industry: Home Furnishings
Market Cap: $1,527 (Millions)

Targets

Price %Gain
Current Price $29.04
Price Target $26.99 -7.1%
Upper Bound $32.66 12.5%
Lower Bound $22.31 -23.2%

Fundamental Variables

P/E Ratio 16.4
Sales Growth 4.2%

Valuation Variables

Past Current Future
Profitability (CFROI) 4.5% 6.9% 5.2%
Growth (in Assets) -1.9% 4.9% 4.8%
Color Legend
Company
Rating
Company
Rank
Excellent Top 10%
Good 11- 30%
Average 31- 70%
Fair 71- 90%
Poor Bottom 10%

Stock data last updated 21-JAN-14.

Data provided by Ativo Research LLC. All information provided “as is” for informational purposes only, not intended for trading purposes or advice. Ativo Research LLC is not liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing this page, you agree not to redistribute the information found herein.

West Texas Intermediate (WTI) Finds Support While Brent Crude Continues to Fall

The price of West Texas Intermediate (WTI) the crude used by U.S. refiners to produce gasoline hits support while Brent Crude which is used in Europe continues to drop. Brent Crude just hit a 16 month low.

Oil Prices

 

Urban Outfitters: URBN)

Urban Outfitters (URBN) will report earnings after the close. Estimates are $0.49 versus $0.51. There is some nice upside to our price target but we need to see some positive guidance as the last couple quarters have seen mixed guidance.

urbn