Category Archives: PPDI

Nasdaq 100 Watch List

Watch List Summary

At the end of the week for September 17, 2010, the top performing stocks from our Nasdaq 100 list for August 15, 2010 are Oracle (ORCL) with a gain of 21.27%, Qualcomm (QCOM) with a gain of 12.07% and Computer Associates (CA) with a gain of 11.57%.
The worst performing stocks from our August 15th watch list are Intel (INTC) down –1.78%, Applied Materials (AMAT) down –1.34% and Activision (ATVI) down –0.46%.
The average gain for the watch list was 6.33%. Of the two stocks that we pointed out as being standouts from August 15th, Garmin (GRMN) exceeded the average return by climbing 9.57% while Paychex (PAYX) underperformed the average gain by rising 3.92%.
A distinction that needs to be made between this week’s list and our August 15th list is that we’ve ranking the companies on this list by those stocks nearest their 52-week low. Our previous list was ranked by those stocks that had the highest dividend yield and within 20% of their respective 52-week low.

Performance Review

The following is a total return (appreciation plus dividends) performance review of our Nasdaq 100 Watch List from September 11, 2009:
  • Stericycle (SRCL) up 44.48%
  • Genzyme (GENZ) up 25.54%
  • Pharmaceutical Product Development (PPDI) up 20%
  • Cephalon (CEPH) up 5.92%
As a group, the average gain for the stocks mentioned was 23.99%. This is contrasted by the Nasdaq 100 gain of 16.07% in the same period of time.

*chart does not reflect dividend reinvestment for PPDI


Nasdaq 100 Watch List

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 Name Price P/E EPS Yield P/B % from Low
PAYX Paychex, Inc. 25.95 19.67 1.32 4.80% 6.67 5.27%
INTC Intel Corporation 18.81 11.26 1.67 3.40% 2.3 6.87%
AMAT Applied Materials, Inc. 11.02 24.44 0.45 2.50% 2.03 7.33%
YHOO Yahoo! Inc. 13.89 22.77 0.61 N/A 1.59 7.34%
MXIM Maxim Integrated Products, Inc. 16.91 41.86 0.4 5.00% 2.15 7.91%
GILD Gilead Sciences, Inc. 34.56 10.47 3.3 N/A 4.58 8.93%
ATVI Activision Blizzard, Inc 10.82 41.94 0.26 1.30% 1.21 8.96%
DELL Dell Inc. 12.45 15.74 0.79 N/A 3.92 9.80%
RIMM Research In Motion Limited 46.72 10.24 4.56 N/A 3.2 9.85%
AMGN Amgen Inc. 55.22 11.73 4.71 N/A 2.28 9.87%
DISH DISH Network Corporation 18.77 11.26 1.67 N/A N/A 10.02%
CSCO Cisco Systems, Inc. 21.86 16.46 1.33 N/A 2.82 10.31%
XRAY DENTSPLY International Inc. 30.66 16.55 1.85 0.70% 2.6 10.45%
MSFT Microsoft Corporation 25.22 12 2.1 2.10% 4.76 10.95%
SPLS Staples, Inc. 19.49 17.26 1.13 1.80% 2.2 11.69%
PDCO Patterson Companies Inc. 27.15 14.67 1.85 1.50% 2.3 12.52%
SHLD Sears Holdings Corporation 66.83 27.38 2.44 N/A 0.9 12.87%
GOOG Google Inc. 490.15 21.29 23.03 N/A 3.77 13.03%
LIFE Life Technologies Corporation 46.51 29.91 1.56 N/A 1.97 13.16%
STX Seagate Technology. 11.16 3.55 3.14 N/A 1.95 13.41%
FLIR FLIR Systems, Inc. 27.24 18.52 1.47 N/A 3.25 13.50%
GRMN Garmin Ltd. 29.64 8.95 3.31 5.10% 2.21 13.52%
TEVA Teva Pharmaceutical Industries 53.48 19 2.82 1.20% 2.48 13.81%
FLEX Flextronics International Ltd. 5.55 15.72 0.35 N/A 2.26 14.20%
COST Costco Wholesale Corporation 61.29 21.93 2.8 1.30% 2.43 14.75%
HSIC Henry Schein, Inc. 56.35 15.82 3.56 N/A 2.31 14.77%
CERN Cerner Corporation 79.18 31.31 2.53 N/A 3.83 14.85%
CELG Celgene Corporation 55.25 29.99 1.84 N/A 5.11 15.06%
CA CA Inc. 20.44 13.43 1.52 0.80% 2.02 15.48%
ERTS Electronic Arts Inc. 16.26 N/A -1.06 N/A 1.96 15.63%
VRTX Vertex Pharmaceuticals Incorpor 36.25 N/A -3.53 N/A 9.01 16.00%
KLAC KLA-Tencor Corporation 31.05 25.31 1.23 3.30% 2.32 16.34%
STLD Steel Dynamics, Inc. 15.01 15.73 0.95 2.00% 1.58 16.45%
WCRX Warner Chilcott plc 22.75 11.2 2.03 N/A 2.82 16.55%
LOGI Logitech International S.A. 15.39 22.57 0.68 N/A 2.68 16.86%
CEPH Cephalon, Inc. 62.26 12.48 4.99 N/A 2.09 17.36%
URBN Urban Outfitters, Inc. 34.11 22.19 1.54 N/A 4.26 18.85%
FWLT Foster Wheeler AG. 24.19 10.8 2.24 N/A 3.46 18.99%
FISV Fiserv, Inc. 53.56 17.16 3.12 N/A 2.57 19.55%
JBHT J.B. Hunt Transport Services, I 35.26 26.73 1.32 1.40% 7.56 19.73%
CTAS Cintas Corporation 27.71 19.64 1.41 1.70% 1.67 19.96%

Genzyme Corp: Value is Finally Being Recognized

There has been a lot of news about Genzyme (GENZ) being considered as a takeover candidate by Sanofi-Aventis (SNY). Typically, rumors are simply that, nothing more than prattle about a washed up company that has little or no life remaining. However, we have demonstrated that discussions of Genzyme (GENZ) being taken over are not so far fetched.
On October 17, 2009 (article link), we had only four companies that were on our Nasdaq 100 Watch List that was within 20% of their respective 52-week lows. This was in contravention to the overall market; which was racing higher every day. So compelling were the companies on the list that we felt it was necessary to give mini-profiles on their value propositions.
Genzyme (GENZ) was one such company that was on that list. We included Genzyme (GENZ) as the last company we profiled since we felt that it was “…a far superior value proposition.” This was despite the fact that Genzyme (GENZ) was the farthest from the new low among the companies on the list.
On October 30, 2009 (article link), we weren’t surprised that drug and medical device makers dominated our list of companies near a new low. In that posting to our site we said, “The continued undervaluation of these companies makes them prime targets for acquisition…” Genzyme (GENZ) was on the list and trading at $50.60. The performance of the stocks that were on the on the October 30 watch list is as follows:

The average gain for the group was 15.32% in 9 months. The worst performing stock has been Gilead Sciences (GILD) with a decline of 22.21%. The best performing stock has been Biogen (BIIB). Our sanguine view on Gilead Sciences (GILD) may be worth reviewing since it has fallen so much since October 30, 2009.
Genzyme has already indicated that they’re not going to accept the Sanofi-Aventis (SNY). This opens the door for competing bids, which should push the price up. Our view at this time is that Genzyme is strictly a speculation, at best, given the rise of nearly 33% since our mention of being a takeover candidate in October 2009.

Sour Grapes: Pharmceutical Product Development Inc. (PPDI)

Sometimes the only way to express your regret for missed opportunities is in the form of bitterness.  In this case the bitterness is in the form of sour grapes as described in Aesop's Fables.  Today's regrettable missed opportunity is Pharmaceutical Product Development (PPDI).  At the close, PPDI was up by 8.18% at a time when the Dow Industrials had fallen by 1.90%.
On July 23, 2009, I bought Pharmaceutical Product Development (PPDI) at $19.26.  I was at my smuggest when I sold the stock for a 9.78% gain in less than 2 weeks.  Suffice to say, had I held on to PPDI from July 2009 until today I would have a 43.5% gain on my hands.  On our February 13, 2010 Nasdaq 100 Watch List, we reiterated looking into PPDI since it had fallen within 21% of the new low.  February 16th, the first trading day after our watch list came out, happened to be in the lowest quintile for 2010 that you could have bought PPDI.  Had anyone followed up on the PPDI recommendation you would have snagged 27.7% in less than 4 months.
Oh well, at least my gain was 260% on an annualized basis as opposed to the annualized gain of 110% since February 2010.  Who needs a stock that goes up 8% when the rest of the market is cratering anyway.
-Touc
Email our team here.

Nasdaq 100 Watch List

Below are the Nasdaq 100 companies that are within 20% of the 52-week low.

Symbol Name Price P/E EPS Yield P/B % from Low
QCOM QUALCOMM 40.05 32.14 1.25 1.70% 3.17
12.94%
FSLR First Solar, Inc. 113.3 15.05 7.53 N/A 3.65
14.78%
GILD Gilead Sciences, Inc. 47.87 16.96 2.82 N/A 6.7
15.88%
ERTS Electronic Arts Inc. 18.42 N/A -2.31 N/A 2.33
17.32%
ATVI Activision Blizzard, Inc 11.82 139.06 0.09 1.30% 1.39
20.00%
This list is strictly for the purpose of researching whether or not the companies have viable business models or are about to go out of business. These companies are deemed highly speculative unless otherwise noted.

Nasdaq 100 Watch List Summary

This week, the top performing stock from last week's watch list was Genzyme Corp. (GENZ) which was up 4.36%.  The worst performing Nasdaq 100 stock from last week was First Solar (FSLR) which fell -1.93%.

Below is the list of the highest yielding stocks that are components of the Nasdaq 100.  This isn't an endorsement of the companies on the list.  However, it is noted that the majority of the companies that pay a dividend are related to the chip sector.  Clustering of companies in a specific industry may indicate that the entire sector is undervalued.  If the companies have high dividend yields on a relative basis (compared to their historical high yields), then these companies may be worth considering despite the fact that they are not within 20% of the new low.    Linear Technology (LLTC), ADP (ADP), and Paychex (PAYX) are Dividend Achievers as well as members of the Nasdaq 100 index. 

Before pursuing any of these companies, be sure to verify the dividend history as well as the earnings capacity to pay the dividend (more commonly known as payout ratio).

  

Symbol Company Price P/E EPS Yield P/B % from low
MCHP Microchip Technology 28.25 31.6 0.89 4.80% 3.53 43.69%
MXIM Maxim Integrated Prod. 19.14 71.69 0.27 4.20% 2.31 48.49%
PAYX Paychex, Inc. 32.17 23.52 1.37 3.90% 8.43 39.87%
LLTC Linear Technology 28.36 24.22 1.17 3.20% N/A 39.98%
ADP ADP 44.6 16.57 2.69 3.00% 3.91 34.10%
INTC Intel Corporation 21.99 28.41 0.77 2.90% 2.94 53.26%
PPDI Pharma Prod. Dev. 22.71 16.94 1.34 2.60% 1.98 26.38%
XLNX Xilinx, Inc. 26.6 24.43 1.09 2.40% 3.68 46.48%
AMAT Applied Materials, Inc. 12.49 N/A -0.07 2.20% 2.37 23.91%
CMCSA Comcast Corp. 17.53 13.9 1.26 2.20% 1.17 40.35%
KLAC KLA-Tencor Corp. 28.79 N/A -0.39 2.10% 2.25 49.25%
Email our team here.

Nasdaq 100 Watch List

Below are the Nasdaq 100 companies that are within 21% of the 52-week low. This list is strictly for the purpose of researching whether or not the companies have viable business models or are about to go out of business. These companies are deemed highly speculative unless otherwise noted (view all.)

-Touc

Symbol Name Trade P/E EPS Yield P/B % from Low
Apollo Group
56.92
13.70
4.16
N/A
6.56
7.82%
Electronic Arts
16.75
N/A
-2.31
N/A
2.09
13.56%
First Solar
116.00
15.46
7.50
N/A
4.37
14.97%
Activision
10.79
125.47
0.09
1.39%
1.28
16.65%
Pharma Prod.
21.20
15.81
1.34
2.83%
1.87
17.97%
Stericycle
54.30
26.81
2.03
N/A
5.36
18.15%
Genzyme
55.97
31.91
1.75
N/A
1.94
18.86%
Gilead
48.84
17.31
2.82
N/A
6.84
20.24%

Nasdaq 100 Watch List

Below are the Nasdaq 100 companies that are within 21% of the 52-week low. This list is strictly for the purpose of researching whether or not the companies have viable business models or are about to go out of business. These companies are deemed highly speculative unless otherwise noted.

Symbol Name Trade P/E EPS (ttm) Yield P/B % from Low
Electronic Arts
16.06
N/A
-4.06
N/A
1.97
8.88%
Apollo Grp
59.22
14.25
4.16
N/A
6.23
12.18%
First Solar
115.10
15.34
7.50
N/A
3.94
14.07%
Stericycle
51.36
25.36
2.03
N/A
5.17
15.18%
Gilead Sci.
47.01
16.66
2.82
N/A
6.47
15.73%
Genzyme Corp.
55.73
31.77
1.75
N/A
1.93
18.35%
QUALCOMM
38.84
31.17
1.25
1.80%
2.98
19.00%
Pharma Product
21.65
13.70
1.58
2.80%
1.92
20.48%
Activision
11.11
45.35
0.25
1.40%
1.24
20.63%
Video game makers Electronic Arts (ERTS) and Activision (ATVI) seemed to be in a race to the bottom until ATVI announced that its earnings beat expectations and that they are going to pay a dividend for the first time. On the news, ATVI moved higher while ERTS continues to languish within 9% of a new low. However, the fact that ERTS is so low and isn't promoting "positive" news makes the company more attractive.
Pharamceutical Product Development (PPDI) is again edging back on to our new low list. As you'll note on my 2009 transaction overview, PPDI was one of my most successful ventures from the Nasdaq 100 Watch List. Although not yet a Dividend Achiever, the company has increased the dividend every year for 4 years in a row. The company has solid financials and carries no debt.
Apollo Group (APOL) has remained on the Watch List for 4 months now. Provided that APOL doesn't fall below the November lows, this company may be worth investigating. With return on assets around 25% and return on equity at around 50% it would be difficult to ignore this special situation. However, my primary concern would be on the issues of long-term debt and quality of reported earnings.
As a group, Genzyme (GENZ), Stericycle (SRCL), Gilead (GILD), and PPDI are all companies that I would invest in, to varying degrees. The healthcare sector, as well as the water utilities on the Dividend Achiever Watch List are demonstrating their relative undervaluation against the overall market.

-Touc

A View on the "Buy Low, Sell High" Concept

As the old investment adage goes, "buy low and sell high." However, the act of buying low has a few complications which hasn't been easily resolved. One problem is knowing when a stock's price is actually at a low price or not. Most people confuse the absolute level of a stock price with being low. For example, if a stock is selling for $2 then a person might think that this is a great price to acquire the shares. However, if $2 is the new high for the price and one year ago the old low was $0.25 then $2 is actually very high.

One way that the New Low Observer (NLO) has managed to isolate whether a stock is at a low price is by waiting until the stock is within 20% of the new low. This approach isn't a cure for what ails the average investor. However, it does allow average market participants the opportunity to investigate quality companies for potential price increases. The new low of a stock automatically implies that value has been created especially if the company in question can survive as a going concern. This is counter to most information coming out of the Wall Street media machine. Typically, analysts on Wall Street recommend stocks that have risen far above the low before initiating coverage on a stock.

While there are 4336 individual stocks that can be bought on American stock exchanges, NLO has determined that there are basically only 383 companies that warrant your attention. The first group of companies are known as the Dividend Achievers (excel list of companies). These 283 companies are tracked by Mergent's based on their ability to increase their dividends every year for over 10 years in a row as a minimum requirement. It goes without saying that these companies pay some kind of dividend with yields that range from over 5% to less than 1%.

The second major group of companies tracked by NLO are the constituents of the Nasdaq 100. In our earlier forms as Dividend Inc. and Arti Invest, we believed that only Dividend Achievers were worth tracking since the dividend payment was verifiable regardless of "accounting" inconsistencies that are commonly found with "other" companies. The performance of this approach has been well documented and proven quite profitable.

However, the reality of the stock market dictates that we widen our perspective on companies that might afford significant opportunity with reduced risk. We, at NLO, decided that the Nasdaq 100 was the next obvious choice. After all, most mutual funds are bound to invest in these companies regardless of their unwillingness to pay dividend income. Additionally, companies in the Nasdaq 100 have solid reputations with higher prospects for growth over the long term.

One recent example of the benefit of tracking and research companies posted on NLO, as opposed to those from the Wall Street media machine, is Stericycle (SRCL). SRCL last appeared on our Nasdaq 100 watch list on October 30th. After being on our watchlist since the July 24th initiation of our website, SRCL has managed to climb from the low of $47.76 to the most recent high of $58. This is an increase of 18% from the July low and 21% from the October low and 11.54% from the breakout above our watch list range of being within 20% of the 52-week low.

NLO can be easily contrasted with the recent short-term buy recommendation placed on SRCL by Zack's Investment Research. In a tiny blurb issued today, Zack's Investment Research indicated that SRCL's stock had been in an oversold state based on the stochastics which indicated or implied that the stock was likely to go higher in the near term.

Unfortunately, offering up information about SRCL long after the stock has risen by at least 18% doesn't serve the small investor. After all, isn't the mantra "buy low, sell high?" It is strange to note that no analysts covering SRCL (in the following link) issued a buy recommendation on the stock after February 2004, even though there has been tremendous opportunities to buy in October 2008, February 2009, May 2009 and October 2009.

SRCL is only one of the companies that has been on the NLO Nasdaq 100 Watchlist that performed exceptionally well after getting off the list. Below are other Nasdaq 100 companies and their performance since getting within 20% of the new low:

It should be noted that the above companies are almost the entire list of companies that have appeared on the Nasdaq 100 Watch List. So far, this implies that quality Nasdaq companies could be investigated for speculative opportunities near the new low. Hopefully this approach can provide a reasonable approach to buying low with the prospect of selling higher. Follow along with us as we continue to investigate the speculative opportunities of the Nasdaq 100. -Touc

Nasdaq 100 Watch List

The following are Nasdaq 100 members that are within 20% of the 52-week low:

  • Genzyme Corp. (GENZ) at $49.74 within 5.63%
  • Apollo Group (APOL) at $56.58 within 7.18%
  • Cephalon, Inc. (CEPH) at $58.94 within 12.16%
  • Electronic Arts (ERTS) at $16.11 within 13.13%
  • Gilead Sciences (GILD) at $46.42 within 14.28%
  • Ryanair Holdings (RYAAY) at $25.34 within 16.40%
  • Biogen Idec (BIIB) at $48.65 within 16.53%
  • Pharma. Prod. Dev. (PPDI) at $21.41 within 16.53%

Nasdaq 100 Watch List

The following are the Nasdaq 100 members that are within 20% of the 52-week low:

  • Cephalon, Inc. (CEPH) at $55.23 within 5.10%
  • Apollo Group (APOL) at $55.76 within 5.63%
  • Genzyme Corp (GENZ) at $51.07 within 8.45%
  • Gilead Sciences (GILD) at $46.56 within 14.62%
  • Ryanair Holdings (RYAAY) at $25.83 within 18.65%
  • Pharma. Prod. Dev. (PPDI) at $21.41 within 19.14%
  • First Solar Inc. (FSLR) at $120.30 within 19.23%
  • Electronic Arts (ERTS) at $17.01 within 19.45%

Nasdaq 100 Watch List

The following are the Nasdaq 100 members that are within 20% of the 52-week low:

  • Apollo Group, Inc. (APOL) at $53.86 within 2.03%
  • Cephalon, Inc. (CEPH) at $59.81 within 13.82%
  • Genzyme Corporation (GENZ) at $49.28 within 4.65%
  • Pharma. Products Dev. (PPDI) at $20.66 within 14.97%
  • Gilead Sciences, Inc. (GILD) at $47.05 within 19.51%

Nasdaq 100 Watch List

The following are the Nasdaq 100 members that are within 20% of the 52-week low:

  • Apollo Group, Inc. (APOL) at $55.99 within 1.16%
  • Cephalon, Inc. (CEPH) at $58.26 within 10.87%
  • Genzyme Corporation (GENZ) at $52.28 within 11.02%
  • Pharma. Products Dev. (PPDI) at $20.93 within 16.47%
  • Gilead Sciences, Inc. (GILD) at $46.26 within 17.50%

It is interesting to note the percentage change that has occurred in last week's Nasdaq 100 watch list. Last week's list had the following one week percentage change:

  • APOL down 1.94%
  • CEPH up 6.74%
  • GENZ up 3.32%
  • PPDI down 2.88%
  • GILD up 8.72%
  • BIIB up 8.62%
  • SRCL up 3.69%
  • AMGN up 2%

The biotech/pharma sector is moving higher. As we've stated before, these companies are very undervalued at the present time. Do your research and carefully consider the opportunities. Touc.

Nasdaq 100 Watch List

The following are the Nasdaq 100 members that are within 20% of the 52-week low:

  • Apollo Group, Inc. (APOL) at $57.10 within 3.16%
  • Cephalon, Inc. (CEPH) at $54.58 within 3.86%
  • Genzyme Corporation (GENZ) at $50.60 within 7.45%
  • Gilead Sciences, Inc. (GILD) at $42.55 within 8.08%
  • Biogen Idec Inc (BIIB) at $42.13 within 13.22%
  • Stericycle, Inc. (SRCL) at $52.37 within 18.06%
  • Amgen Inc. (AMGN) at $53.62 within 19.26%
  • Pharmaceutical Product Developm (PPDI) at $21.55 within 19.92%

The fact that all of these companies (except for APOL) are within the drug industry does not surprise me. The continued undervaluation of these companies makes them prime targets for acquisition by investors and larger drug companies. Touc.

Watch List Update

This week the market took me by surprise. The Dow rose 4%. My watch list shrank from 15 companies to 11 companies. Here are the companies on my watch list as of July 24, 2009.
Dividend Achiever Watch List

Nasdaq 100 Watch List The companies that are within 10% of the low offer a great opportunity to do research and consider buying.

Market Action

The biggest development was the Dow Theory confirmation of a bull market that occurred on Thursday. The Transports confirmed the Industrials with a big move (see charts below).With this action, Richard Russell recommended people to buy Goldman Sachs (GS). I would suggest you consider either the names I recommended on this blog in the watchlist above or the Dow index (DIA) or S&P 500 index (SPY).

Recent Analysis

On July 22, 2009, I wrote an article about the current market and a comparison to the 1980's. It also contained some information and important news on real estate. Also, I did a review of my investment strategy for the Dividend Achiever Carlisle (CSL) on the July 23rd. It was a great position for those who followed my advice.

News & Video

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