BREAKING OUT – 01/25/2013

With the bull still wild, we have another good set of promising breakouts.

TPX

Before we go anywhere let’s look at a breakout we talked about yesterday. Interestingly, GAAP EPS of $0.39 for Q4 were 54% lower than the prior-year quarter’s $0.84 per share. For the quarter, gross margin was 50.0%, 210 basis points worse than the prior-year quarter. Operating margin was 15.0%, 840 basis points worse than the prior-year quarter. Net margin was 6.9%, 850 basis points worse than the prior-year quarter. Decreased 7.01% to $342 million from the year-earlier quarter.

But it did one thing right – The EPS of $0.60 a share, beat the $0.55 average analyst estimate. Revenue of $342 million also beat the $339 million estimate. Result-

TPX

The surprise of the day is a break out of good ole Proctor and Gamble. Earnings is the driver for this BO. Kudos to the management’s effort, the Adjusted gross and adjusted operating margins popped 110 basis points to 51.2% and 20.0%. Underlying second-quarter sales ticked up 3% year over year–on top of a 4% increase in last year’s second quarter–including a 5% jump in baby and feminine care, 4% in health care, and 3% in fabric and home care.

PG

CHUY: Fast growing TexMex joint broke out today. But there is a road bump right ahead. I entered it at $26.4 today.

CHUY

HAL: Been a long time favorite of mine – Halliburton. It broke out today. I have owned it since it’s early 30s. I would wait for some consolidation before entering now due the run up it had in last two months.

Today’s BO was due to better than expected earnings. All three of Halliburton’s international regions and 8 of its 12 product lines set new revenue records. Sequentially, the Middle East/Asia region increased revenue 14% to $1.2 billion, and in the Europe/Africa/Commonwealth of Independent States region, revenue increased 8% over the same time frame to $1.2 billion as well. Overall, Halliburton’s international operating margin improved to 17.6% from 14.6% in the prior quarter. But the picture was exactly opposite in US. The revenue dipped 5% sequentially to $3.8 billion while adjusted operating income declined 22% over the same time frame to $465 million. The operating margin for the region declined to 12.4% from 14.1% last quarter, still above Baker Hughes’ BHI 8.7%. Overall the revenue was up 3% YoY.

HAL

Other key breakouts have been – PCLN (Priceline), ROSE (Rosetta Resources – Need to compare this with CLR), TEX (Terex), THO (Thor Industries) and CPWR (Compuware – a prime recruiter in Detroit Area.)

Break Out Watch List – KORS, JOBS, ISRG, MDVN, CTRX, LL and LNKD.

Lastly, what happens when you miss the estimates by miles –

SCSS

Analysts polled by FactSet expected the company to earn 32 cents per share on revenue of $229.8 million.

Net income fell to $12.5 million, or 22 cents per share, for the period ended Dec. 29. That compares with $15.4 million, or 27 cents per share, in the same quarter last year. Select Comfort’s total revenue increased 17 percent to $220.6 million. Select Comfort expects to earn between $1.65 and $1.80 in fiscal 2013 fiscal. Analysts forecast $1.89 per share.

Well, you get pummeled!

SCSS

I initiated a short at $23.5 with stop at $24.5. Now I will close it at $21. This being a bull market. I think any short is a risky proposition.

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Portfolio as of 9/16/2012

My portfolio hasn’t changed much over last few weeks (again MUCH is a relative term;)). But first let’s pledge our allegiance to Mr. Bernanke,the great savior of the markets. Mr Bernanke came out once again to mitigate the impact of bad job numbers. I guess sooner or later Bruce Wayne will have competition.

Four weeks ago I told my colleague that I am seeing very strong buy signals. In last four years I have seen such signal fail only twice. So I went all in! WooHoo!!

I added eight new stocks and two ETFs to the portfolio in last month. I also got rid of EQIX at $199. I am thinking of adding ULTA and getting back into EQIX – Nothing as of now. I will talk about them in details in the next post.

I sold TFM due to the breakdown. I also bought and sold CRUS – bought it at $35.5 and sold it at $40.1. I am surprised by it’s move to $45 – apple effect. I also unloaded STX after a long time. I plan on hanging on with only one high beta disk drive company.

Some people might say that I own a lot of stocks but I have been tracking most of these companies for over 3 years and buy and sell signals are generated by programs. I own a lot of stocks because I dont want to overexpose myself to anyone company. The companies that I own is a mix of fast growers and slow growers (called GARP). There are handful of value stocks as well such as APA, F, HAL, etc.

Please talk to me before jumping in because we are due a 4 to 5% correction before the Santa Claus rally starts. Also being an election year, the market has to end in positive (+16% isn’t too bad either). What I mean is that we might remain flat for rest of the year. Lastly, I plan on taking some profits off the table by selling some ALXN, UA,LNKD, JPM, etc.

You can see my previous portfolio update here.

Cash=2%.

SLV=3% (Entered at $29.5)

GLD=5% (Entered at $160.5)

LNKD=5% (Entered at $101 and some at $113.5)

UTHR=5% (Entered at $53.5)

KORS=4% (Entered at $51.5)

NOV=4% (Entered at$77.5) (Price target is $100 and I plan on adding more after $86)

ARUN=4% (Entered at $19.5) (Price target is $25)

CLR=4% (Entered at$76.5 and added more at $80.2) (Price target is $95)

JPM=4% (Entered at $33.9) (Price target is $45)

DG = 5% (Enetered at $51)

WWWW=3% (Entered at $17.5 AND Will add more after $20)

EMC = 4% (Expect it to reach $29.5) . Reasons for purchase.

AAPL = 4% (Set more buy @ $630)

WDC = 4% (Expect it to reach $49.5) Why Did I buy?

QCOM=5% (Expect it to reach $69, if it stays over $59 for few more days) Why Did I buy?

APA=3% (Sold some at $88) Reasons

HAL =6% (Expect it to reach $40) Reasons

UA=4% (Set additional buys @ $54.9) Reasons for purchase. (I missed the doubling oppurtunity)

SCSS=4% (Set additional buys at $25.9) Reasons for purchase. (This is sleep number mattress which I entered at $26.1)

SWKS=4% (Will add more at $25.9) Reasons for purchase. I am very disappointed with it’s price action. I don’t know what market expects of this company even after Iphone 5 release.

ALXN=6% Reasons

FFIV =3% (In Red) Reasons

F=5% (In Red) – Worst Mistake Ever

Ready to Fold some – Portfolio as of 08/13/2012

I guess it’s time to take some profits my friends. Cash = 25%. Portfolio as of 08/03/2012

I still see opportunities such as LNKD@$102, MELI @$84, TDC@75.1, ROST@65, DKS@50.5, HIBB@63  and UTHR@52.1. But I would suggest that purchases of ROST, DKS and HIBB should be avoided till the earnings are out.

Earning’s gain. See CRUS below.


Earning’s Pain. See Priceline below.

If you can take a hit please feel free to buy 50% position in ROST and DKS.

JPM=3% (Entered at $33.9)

DG = 5% (Enetered at $51)

TFM=5% (Entered at $59.5)

WWWW=3% (Entered at $17.5 AND Will add more after $20)

STX = 1% (Sold some at $33.1). Why Did I buy?

EMC = 4% (Expect it to reach $29.5) . Reasons of purchase.

AAPL = 4% (Set more buy @ $569)

WDC = 6% (Expect it to reach $49.5) Why Did I buy?

QCOM=5% (Expect it to reach $69, if it stays over $59 for few more days) Why Did I buy?

APA=3% (Sold some at $88) Reasons

HAL =5% (Expect it to reach $40) Reasons

UA=3% (Set additional buys @ $54.9) Reasons of purchase.

SCSS=2% (Set additional buys at $25.9) Reasons of purchase.

SWKS=4% (Will add more at $25.9) Reasons of purchase.

EQIX=5% Reasons of purchase.

ALLT=4% – Will it miss next quarter’s earnings?

ALXN=6% Reasons

FFIV =3% (In Red) Reasons

F=5% (In Red) – Worst Mistake Ever

TLT=2% (Sold most TLT last week)

Lastly, I got this in the email today morning –

Performance Year To Date – Three Best purchases, Two Ugly Mistakes and One Missed Boat (& a Sexy Short!)

Performance in Quarter 1

Last four months have been one heck of a roller coaster ride. One account lost 12% where as the other account made 15%. But overall the returns have been in the vicinity of 30% YTD.

The major boost that the portfolio got was from the turn around of STX and WDC, the largest holding.

Please see below –

BEST PURCHASES OF THE YEAR –

AAPL

SCSS

ALXN

WORST SALES

URI

FFIV

MISSED BOAT

SWI

SEXY SHORT –

GMCR

Portfolio as of 08/03/2012

With almost nothing on the side, we move into a new week. Cash = 15%. Portfolio as of 7/28/2012

I still see opportunities such as LNKD@$102, MELI @$81, TDC@75.1, ROST@65, DKS@52, HIBB@63  and UTHR@52.1.

JPM=3% (Entered at $33.9)

DG = 5% (Enetered at $51)

TFM=5% (Entered at $59.5)

WWWW=3% (Entered at $17.5 AND Will add more after $20)

STX = 3% (Might add more depending on OCZ acquisition and today’s results). Why Did I buy?

EMC = 4% (Expect it to reach $29.5) . Reasons of purchase.

AAPL = 4% (Set more buy @ $569)

WDC = 6% (Expect it to reach $49.5) Why Did I buy?

QCOM=5% (Expect it to reach $69, if it stays over $59 for few more days) Why Did I buy?

APA=6% (Expect it to reach $119) Reasons – VERY DISAPPOINTED WITH THE EARNINGS, THINKING OF CUTTING BACK 50%.

HAL =5% (Expect it to reach $40) Reasons

UA=3% (Set additional buys @ $54.9) Reasons of purchase.

SCSS=2% (Set additional buys at $25.9) Reasons of purchase.

SWKS=4% (Will add more at $25.9) Reasons of purchase.

EQIX=5% Reasons of purchase.

ALLT=4% — Will it miss next quarter’s earnings?

ALXN=6% Reasons

FFIV =3% (In Red) Reasons

F=5% (In Red) — Worst Mistake Ever

TLT=2% (Sold most TLT last week)

Portfolio as of 7/28/2012

I have been expanding my foot print slowly but steadily. Portfolio as of 7/16/2012.
Cash = 30%

STX = 3% (Might add more depending on OCZ acquisition and today’s results). Why Did I buy?

EMC = 4% (Expect it to reach $29.5) . Reasons of purchase.

AAPL = 4% (Set more buy @ $569)

WDC = 6% (Expect it to reach $49.5) Why Did I buy?

QCOM=5% (Expect it to reach $69, if it stays over $59 for few more days) Why Did I buy?

APA=6% (Expect it to reach $119) Reasons

HAL =5% (Expect it to reach $40) Reasons

UA=3% (Set additional buys @ $54.9) Reasons of purchase.

SCSS=2% (Set additional buys at $25.9) Reasons of purchase.

SWKS=4% (Will add more at $25.9) Reasons of purchase.

EQIX=5% Reasons of purchase.

ALLT=4%

ALXN=6% Reasons

FFIV =3% (In Red) Reasons

F=5% (In Red)

TLT=5%

Four Growth Stories – SWKS, SWI, EQIX and SCSS

SWKS

Skyworks designs and manufactures several types of chips that enable wireless capabilities in cell phones and tablets. The company’s circuits are used in the devices of Apple, HTC and Samsung. Long known as a Power Amplifier (PAs) manufacturer, the company now offers the full range of analog, radio-frequency (i.e., RF), and power management circuits between the handset transceiver and antenna. It has recently added power management circuits to its portfolio.

SWKS reported solid fiscal third-quarter earnings and gave investors a bright fourth-quarter outlook.

Mar-11 75% 33%
jun-11 40% 25%
Sep-11 33% 30%
dec-11 -10% 20%
Mar-12 -33% 13%
Jun-12 60% 10%

SWI

SolarWinds has been on a tear for the last year and a half; the company’s second-quarter sales increased by 40% year over year to $64 million–the fifth straight quarter that SolarWinds’ year-over-year sales growth has accelerated–and beat management’s first-quarter guidance of $59.0 million-$60.2 million. SolarWinds’ performance is particularly impressive because the company is focused on growing its operations in a tough European market.

Break out buyers – $48 was break out point, but in this market just initiate a 50% position.

SWI eps Change Sales Change
Mar-11 31% 25%
Jun-11 28% 29%
Sep-11 49% 31%
Dec-11 21% 34%
Mar-12 40% 40%
Jun-12 50% 40%

EQIX

Equinix is the largest network-neutral provider of data centers in the world. Equinix’s customers have the ability to plug into a host of network providers to speed up connections to content partners, financial exchanges, ad servers, and the like. As Internet traffic grows as a result of cloud computing, video streaming, and continued enterprise outsourcing of data centers, managing bandwidth and network connections becomes more complex.

This company serves 4000 clients and routes almost 90% of world’s internet traffic.

Only concern I have is the slowing growth.

Mar-11 50% 85%
Jun-11 1400% 33%
Sep-11 -13% 30%
Dec-11 30% 28%
Mar-12 40% 27%
Jun-12 15% 18%

Market generally doesn’t like slowing growth specially for high multiples company.

SCSS

I have owned this company in the first quarter of the year and again started a position last week. No, I don’t have a crystal ball, I bought it after the earnings. The company makes sleep number mattress and has been on a roll for over last 6 quarters.

I have buy orders in place at $25.5.

  • Sales were up 27% YoY.
  • Same store sales were up 25% YoY, unchanged from the 25% for the same quarter last year.
  • The company was able to achieve an EPS of $0.3. This was 11% higher than the Street’s estimate of $0.27.
  • The number of stores is being increased from 381 last year ending December 2011, to the 408-412 range at present.
SCSS eps Change Sales Change
Mar-11 114% 22%
Jun-11 82% 16%
Sep-11 63% 25%
Dec-11 85% 27%
Mar-12 33% 40%
Jun-12 51% 27%