Below are the eight Nasdaq 100 companies that are on our radar. Also, we review analyst estimates for the stocks on our list, the altimeter of an individual stock and the exceptional performance of our top five stocks from one year ago.
| Symbol | Name | Price | P/E | EPS | Yield | P/B | % to low |
| CTRX | Catamaran Corporation | 44.99 | 40.21 | 1.12 | - | 1.9 | 2.23% |
| ALTR | Altera Corp. | 32.12 | 22.48 | 1.43 | 1.9 | 2.85 | 4.90% |
| ISRG | Intuitive Surgical, Inc. | 377.38 | 22.57 | 16.72 | - | 4.29 | 5.70% |
| MXIM | Maxim Integrated Products, Inc. | 28.46 | 19.64 | 1.45 | 3.7 | 3.3 | 7.44% |
| CHRW | CH Robinson Worldwide Inc. | 57.89 | 15.93 | 3.63 | 2.4 | 8.99 | 7.72% |
| EBAY | eBay Inc. | 52.01 | 24.77 | 2.1 | - | 2.92 | 8.22% |
| EQIX | Equinix, Inc. | 165.48 | 82.66 | 2 | - | 3.38 | 8.28% |
| GOLD | Randgold Resources Limited | 65.44 | 19.16 | 3.42 | 0.7 | 2.17 | 8.76% |
*Stocks that appear on our watch lists are not recommendations to buy. Instead, they are the starting point for doing your research and determining the best company to buy. Ideally, a stock that is purchased from this list is done after a considerable decline in the price and rigorous due diligence.
Analyst Estimates
Below is a snapshot of the analysts low estimated earnings assuming a price-to-earnings ratio of 15 for the next 12 months and the percentage change in price that is implied based on these low earnings estimates.
Watch List Summary
Randgold (GOLD) is the company that catches our eye the most. Below is Edson Gould’s altimeter for Randgold:
There are two primary concerns when we consider a stock, the value and downside risk. In the case of Randgold Resources, the altimeter suggests that Randgold is currently below the value of the 2008 low for the stock, this is indicated by the horizontal green line using the the 2007, 2008 and 2012 levels as support in the chart above.
Again, the altimeter is the relative value of the stock based on the dividend that is paid and the stock price. Based on the the recent pattern of the dividends for Randgold, we expect that an eighth straight year of dividend increases is on the way for the stock. According to Yahoo!Finance, Randgold has a $3.42 in earnings with a dividend payment of $0.48 or a dividend payout ratio of 14%. This leaves a lot of room for a continuation of dividend policy at a time when earnings are not their strongest for the gold mining sector. This seems to indicated that, all things being equal, Randgold’s altimeter will decline further.
The only ways that the Randgold altimeter will increase is if the stock price increases dramatically or the dividend is cut. If the dividend were cut, it would need to decrease -30% (from the current level of $0.48 to $0.33) in order for the altimeter to retest the green line on the upside.
Already we can see that analyst expectations based on next year’s earnings implies that Randgold’s stock price will decline approximately –27% from the current level. The volatile nature of gold stocks would indicate that this risk is likely. However, as with our recent conservative downside targets for the price of gold being achieved (found here), Randgold has achieved its conservative downside target of $67.32. There is the remote possibility that gold and Randgold, after achieving their conservative downside targets from near parabolic peaks along with the low of the Gold Stock Indicator, are poised for a relief rally within the next 12 months.
The extreme downside target for Randgold is $41.57 which is -36% below the current price of $65.44.
The last thing that needs to be considered is the prospect of Randgold being dropped from the Nasdaq 100 in the upcoming re-ranking. We’ve already demonstrated the exceptional performance of stocks that are dropped from the Nasdaq 100 compared to the stocks that are added to the index (found here). However, we wouldn’t be surprised that the initial reaction for Randgold’s stock price could be negatively affected.
Performance Review
Below is a table from our December 6, 2012 (found here) Nasdaq 100 Watch List and the performance of each stock. The entire list of stocks gained an average of +39.73% while the top five stocks (WCRX, BIDU, VOD, BBBY and MCHP) gained +63.72%. These gains compare to the Nasdaq 100 gain of +32.28% in the same period of time.
|
Symbol
|
Name | 2012 | 2013 | % change |
| WCRX | Warner Chilcott plc | 11.31 | 22.93 | 102.74% |
| BIDU | Baidu, Inc. | 88.47 | 168.71 | 90.70% |
| VOD | Vodafone | 25.87 | 37.72 | 45.81% |
| BBBY | Bed Bath & Beyond Inc. | 57.79 | 78.13 | 35.20% |
| MCHP | Microchip Tech | 30.22 | 43.56 | 44.14% |
| INTC | Intel Corporation | 20.1 | 24.82 | 23.48% |
| ALTR | Altera Corp. | 31.08 | 32.12 | 3.35% |
| MSFT | Microsoft Corporation | 26.63 | 38.36 | 44.05% |
| CTXS | Citrix Systems, Inc. | 60.13 | 60.03 | -0.17% |
| NVDA | NVIDIA Corporation | 11.95 | 15.47 | 29.46% |
| EXPD | Expeditors Int’l of WA | 36.78 | 43.44 | 18.11% |
| SPLS | Staples, Inc. | 11.37 | 15.96 | 40.37% |
| FLEX | Flextronics Int’l | 5.9 | 7.48 | 26.78% |
| KLAC | KLA-Tencor Corp. | 46.53 | 62.65 | 34.64% |
| ATVI | Activision | 11.28 | 17.2 | 52.48% |
| AMAT | Applied Materials | 10.76 | 16.83 | 56.41% |
| DLTR | Dollar Tree, Inc. | 40.28 | 55.17 | 36.97% |
| APOL | Apollo Group Inc. | 20.18 | 25.06 | 24.18% |
| ^NDX | NASDAQ-100 | 2,649.12 | 3,504.26 | 32.28% |
Disclaimer: Stocks that appear on our watch lists are not recommendations to buy. Instead, they are the starting point for doing your research and determining the best company to buy. Ideally, a stock that is purchased from this list is done after a considerable decline in the price and extensive due diligence. Our view is to embrace the worse case scenario prior to investing. It is important to place these companies on your own watch list so that when the opportunity arises, you can purchase them with a greater margin of safety. It is our expectation that, at the most, only 1/3 of the companies that are part of our list will outperform the market over a one-year period.