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Category Archives: EA
Sell Electronic Arts and Symantec
On our April 27, 2012 Nasdaq 100 Watch List, we highlighted Electronic Arts (EA) and Symantec (SYMC) as stocks of interest out of the 17 equities listed (found here). Now that both stocks have gained just under +50% in 13 months, we believe the value component has been taken out of these companies. In keeping with Dow’s Theory of seeking fair profits and while there are still willing buyers, we recommend selling these stocks at the earliest opportunity.
Electronic Arts achieved two of the three downside targets that we had while Symantec achieved two of the four downside targets. Anyone interested in maintaining positions in these stocks should consider selling the principal only.
Comments Off on Sell Electronic Arts and Symantec
Posted in EA, Sell Recommendations, SYMC
Nasdaq 100 Watch List: June 8, 2012
Below are the Nasdaq 100 companies that are within 10% of their respective 52-week lows. 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.
symbol | Name | Price | P/E | EPS | Yield | P/B | % from Low |
SYMC | Symantec Corporation | 14.57 | 9.28 | 1.57 | - | 2.06 | 2.17% |
DELL | Dell Inc. | 12.12 | 6.92 | 1.75 | - | 2.28 | 2.71% |
CHRW | CH Robinson Worldwide Inc. | 57.92 | 21.6 | 2.68 | 2.3 | 7.51 | 3.65% |
EA | Electronic Arts Inc. | 13.47 | 58.57 | 0.23 | - | 1.75 | 4.74% |
INFY | Infosys Ltd. | 43.62 | 14.54 | 3 | 1.3 | 3.81 | 5.36% |
NVDA | NVIDIA Corporation | 12.12 | 14.8 | 0.82 | - | 1.72 | 5.67% |
GMCR | Green Mountain Coffee Roasters | 23.13 | 11.11 | 2.08 | - | 1.76 | 6.25% |
EXPD | Expeditors Int'l of WA | 39.36 | 22.75 | 1.73 | 1.4 | 3.95 | 6.49% |
CTRP | Ctrip.com Int'l | 18.66 | 17.86 | 1.04 | 0 | 2.38 | 6.63% |
SPLS | Staples, Inc. | 12.86 | 9.23 | 1.39 | 3.4 | 1.24 | 7.71% |
LRCX | Lam Research | 37.62 | 16.65 | 2.26 | - | 1.72 | 8.07% |
NFLX | Netflix, Inc. | 65.64 | 22.22 | 2.95 | - | 5.41 | 8.14% |
WYNN | Wynn Resorts Ltd. | 104.21 | 22.1 | 4.72 | 1.9 | 46.53 | 8.76% |
NTAP | NetApp, Inc. | 30.33 | 19.2 | 1.58 | - | 2.65 | 9.14% |
MCHP | Microchip Technology Inc. | 32.01 | 19.4 | 1.65 | 4.4 | 3.08 | 9.25% |
VOD | Vodafone Group | 26.58 | 12.6 | 2.11 | 7.5 | 1.1 | 9.34% |
MRVL | Marvell Technology | 12.28 | 13.15 | 0.93 | 2 | 1.4 | 9.35% |
ORCL | Oracle Corporation | 27.16 | 14.23 | 1.91 | 0.9 | 3.16 | 9.87% |
CTSH | Cognizant | 58.85 | 19.81 | 2.97 | - | 4.14 | 9.92% |
Watch List Summary
Of interest on our watch list is NVIDIA (NVDA). According to Yahoo!Finance, “NVIDIA Corporation provides graphics chips for use in smartphones, personal computers (PC), tablets, and professional workstations markets worldwide.” As we’ve described in the past, we have a strong interest in chip sector stocks and believe that the long-term prospects for companies in the chip industry is very appealing.
NVDA first appeared on our watch list on June 12, 2010. At that time, NVDA was trading at $11.61. By February 18, 2011, NVDA was trading as high as $25.68 which was a gain of over +120%. We’re not certain that NVDA’s decline has ended. According to Edson Gould’s Speed Resistance Lines, NVDA has already declined below the conservative downside target of $17.87 based on the February 2011 high. The persistence of the current decline suggests that the stock could decline to the extreme downside target of $8.67. We’re doing everything we can to hold off buying this stock at the current time.
Watch List Performance Review
The following is a performance review of the top five Nasdaq 100 Watch List from June 4, 2010. Keep in mind that this is a 2 year performance review instead of a 1 year review.
Symbol
|
Name | 2010 | 2012 | % change |
GILD | Gilead Sciences, Inc. | $34.71 | 49.21 | 41.77% |
SYMC | Symantec Corporation | $13.92 | 14.43 | 3.66% |
ERTS | Electronic Arts Inc. | $15.81 | 13.07 | -17.33% |
APOL | Apollo Group, Inc. | $51.48 | 32.42 | -37.02% |
QCOM | QUALCOMM | $35.30 | 55.85 | 58.22% |
average | 9.86% | |||
NDX | Nasdaq 100 | 1,832.04 | 2,478.13 | 35.27% |
As can you can see, the list of top five stocks significantly underperformed the Nasdaq 100 (NDX), mainly due to Apple Inc. (AAPL) having an outsized impact on the index. However, underneath the static 2-year performance data is a story to be told, which is the basis of our New Low investment strategy.
In the chart below, take note of the period around July 2011. At that time, Qualcomm had gains of +60%, Electronic Arts had gains of +55%, Symantec had gains of +42% and Gilead Sciences had gains of +21%. Only Apollo Group had losses to compare against the other stocks.
In the case of Symantec and Electronic Arts, they have come full circle after a 2-year period. This cycle is not unusual for most of the stocks that we track. Even when the stock does not approach the prior low of a watch list, many stocks attain a 52-week low after 2 to 2.5 years (as in the NVDA example above). Be on the lookout for stocks that have similar cycles like EA, SYMC and NVDA since their ability to replicated such moves adds to the prospect that they could pull a repeat performance.
Posted in apol, EA, electronic arts, GILD, gilead sciences, Nasdaq 100 Watch List, NVDA, Nvidia, qcom, Qualcomm, SYMC
Nasdaq 100 Watch List: April 27, 2012
Below are the Nasdaq 100 companies that are within 20% of their respective 52-week lows. 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.
Symbol | Company | Price | P/E | EPS | Yield | P/B | % from Low |
CHRW | CH Robinson Worldwide | 59.02 | 22.01 | 2.68 | 2.2 | 7.72 | 0.49% |
FSLR | First Solar, Inc. | 18.35 | 0 | -0.46 | 0 | 0.43 | 3.03% |
EXPD | Expeditors Int'l | 39.9 | 22.29 | 1.79 | 1.3 | 4.27 | 4.31% |
CTRP | Ctrip.com Int'l | 21.66 | 19.32 | 1.12 | 0 | 2.76 | 5.40% |
EA | Electronic Arts Inc. | 15.32 | 0 | -0.52 | 0 | 2.34 | 5.80% |
INFY | Infosys Ltd. | 47.06 | 15.69 | 3 | 1.2 | 4.07 | 5.87% |
APOL | Apollo Group Inc. | 35.78 | 7.79 | 4.6 | 0 | 3.99 | 6.14% |
SYMC | Symantec Corporation | 16.48 | 15.86 | 1.04 | 0 | 2.58 | 10.31% |
RIMM | Research In Motion | 14.03 | 6.32 | 2.22 | 0 | 0.72 | 12.69% |
NVDA | NVIDIA Corporation | 12.98 | 13.81 | 0.94 | 0 | 1.93 | 13.16% |
VOD | Vodafone Group plc | 27.93 | 12.64 | 2.21 | 3.4 | 1.06 | 14.89% |
SNDK | SanDisk Corp. | 37.58 | 10.51 | 3.58 | 0 | 1.29 | 16.56% |
ALTR | Altera Corp. | 35.56 | 17.6 | 2.02 | 0.9 | 3.73 | 17.01% |
NTAP | NetApp, Inc. | 39.03 | 25.99 | 1.5 | 0 | 3.53 | 18.27% |
ORCL | Oracle Corporation | 29.24 | 15.32 | 1.91 | 0.8 | 3.37 | 18.28% |
VMED | Virgin Media, Inc. | 24.45 | 64.01 | 0.38 | 0.7 | 6.81 | 19.15% |
SRCL | Stericycle, Inc. | 87.64 | 32.58 | 2.69 | 0 | 6.08 | 19.97% |
^NDX | NASDAQ-100 | 2,741.34 | - | - | - | - | - |
Watch List Summary
First on our list is Electronic Arts (EA). the last time Electronic Arts was on our Watch list was on June 6, 2010. At that time, Electronic Arts was trading at $15.81 with a per share earnings loss of –$2.08 and with a price-to-book ratio of 2. By July of the next year, Electronic Arts increased in value by +58%.
Electronic Arts (EA) has the following downside targets:
-
$12.77
-
$10.22
-
$7.66
Ordinarily, we don’t have a preference for a stock that doesn’t have earnings, however, the reason we focus on the Nasdaq 100 is because we know that lacking any value attributes, companies won’t disappear from the index until the end of each year, unless an acquisition occurs. This usually means that stocks in this index will likely appear to rebound due to significant institutional support and the requirement to be invested in constituents of the index.
Next on our watch list is Infosys Ltd (INFY). Infosys appeared on our watch list on September 9, 2011 at the price of $47.17. Less than two months later, Infosys (INFY) increased and peaked at +30% above the price of when it was on our watch list. Below are the downside targets to consider if purchasing INFY:
-
$38.43
-
$34.11
-
$29.80
-
$21.17
Finally, the next company on our list is Symantec (SYMC) which last appeared on our watch list on December 16, 2011. At the time, SYMC had a P/E ratio of 17.59 and a price-to-book ratio of 2.49.
Shortly after appearing on our December 16, 2011 watch list, SYMC rose +21%. The following are the downside targets for anyone considering the purchase of SYMC:
-
$14.24
-
$13.26
-
$12.20
-
$10.05
Considering all of the companies on our watch list, we believe that the three that we’ve covered are reasonable investments at the current time, with money set aside for a second purchase if the stock price declines.
Watch List Performance Review
The top five stocks on our watch list from April 29, 2011 got hammered in the market decline from June to October 2011. Hardest hit was Akamai which fell over –40%. Only three stocks gained more than +10% within a year. Right out the gate was TEVA in the first month. Nearly 9 months after our watch list, CSCO and MRVL were able to gain +10%. The average return of all five companies in the last year was –0.10%.
symbol | Company | 2011 | 2012 | % change |
Akamai Tech. | 34.43 | 33.18 | -3.63% | |
TEVA | Teva Pharma. | 45.73 | 45.63 | -0.22% |
CSCO | Cisco Systems | 17.52 | 19.98 | 14.04% |
URBN | Urban Outfitters | 31.47 | 29.21 | -7.18% |
MRVL | Marvell Tech. | 15.43 | 14.89 | -3.50% |
Average | -0.10% |
Posted in EA, erts, INFY, Nasdaq 100 Watch List, SYMC