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.

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.

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

The Week Ahead

1.Geopolitical and Fiscal Events. Congress is on recess for the next four weeks and markets should like this vacation from the political nonsense. President Obama continues a two week vacation in Martha’s Vineyard. Friday sees Federal Reserve Chairman Yellen speak.

2.Economic Releases. Releases of note this week other than the weekly chain store sales, oil/gas numbers, mortgage applications and jobless claims include CPI, leading indicators, Philly Fed Survey and existing home sales.

3.Earnings Releases. Notable releases include (in order of day’s reporting with Monday first and Friday last) HTZ URBN HD MDT HPQ LOW CRM INTU FL ANN among others companies as we continue Q1 earnings. See the earnings section.

Futures Higher

In After Hours Trading

No IPOs on deck today. Secondaries on deck today CLRB NEO.

IPO Financial provides our capital raise data.

In After Hours Trading (Best to Worst absolute beats/misses [+.02 or greater/-.02 or worse]): SINA+.08, ADSK+.07, A+.04

What’s Happening This Morning

US futures: S&P 500 +4.50, Dow Jones +45 and NDX +13 with fair values lower helping gains. Asia and Europe higher. Copper higher with silver and gold higher. WTI Crude and Brent Oil Futures higher. Natural Gas is lower. $ is lower vs Euro, lower vs. Pound and higher vs. Yen. US 10 year Treasury yield -1. Prices as of 7:30 a.m. EDT THERE WILL BE NO MARKET MATTERS NEXT WEEK AS WE WILL BE ON VACATION. IT WILL RETURN AUGUST 25th.

Earnings Expected

Earnings due after the close (by market cap descending): none

Due Monday morning (by market cap descending): none

Rags & Mags: Inside Wall Street

USA Today: Carl Icahn places a bet on Gannet (GCI). Chiquita Brands (CQB) rejects $13 takeover. General Electric may sell appliance business.

 

 

The Madison Letter: Current Update

We began to offer a buy and sell strategy via our Madison Market Timing Indicator at the beginning of April of 2007. There are now 23 open and closed winning trades to 8 closed losing trades with our market timing results. We closed longs on OIH FXI EEM and IYR for gains four weeks ago. We were left with one long position TRF from our original buys before launching with Uncommon Widsom Daily. This column replaces the Morning Matters on Fridays. We established a new buy that is working well.

madison market timiing

J.C. Penny (JCP)

J.C. Penny (JCP) rose in after hours on better than expected earnings. The beat was $0.20. There is still nice upside with respect to our price target. Worth a look.

jcp

Options Activity

Index ETF Options Volume

We are going to highlight unusual options activity as well going forward. The third column from the left will highlight such outliers. EFA had unusual volume and excess put action. EFA is an ETF tracking Europe and looks like excess bearish bets are being made at the bottom. Options volume continues to come in very light..

oix daily

 The rows in the options matrix are as follows:

  • Curr Vlm = Current Option Volume for today
  • OpVol20 = 20 day Option Volume average
  • % Delta (sorted descending) = Curr Vlm/ OpVol20 * 100
  • Sym = Symbol
  • 20 HV 100HV 252HV = 20 day, 100 Day and 252 Day Historical Volatility
  • Slope = The slope of the historic vol
  • Delta = Change in slope
  • cOptInt = Call Open Interest
  • pOptInt =Put Open Interest
  • cVolum = Call Volume
  • pVolum = Put Volumed