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We've been so
focused on the economy and the overall market's health in the last few
editions of the newsletter that we haven't had much opportunity to talk
about individual stock ideas. We're going to remedy this today by looking
at a handful of the most compelling names we've come across this week.
As
usual, we're simply going to highlight what we think are some of the better
opportunities we see popping up right now. Some rationales are chart-based,
some are fundamental-based (and some are both). None of them are official
trades just yet, but any of them could be soon.
 Maui
Land & Pineapple Co. Inc. (MLP)
Maui Land &
Pineapple certainly didn't grab our interest because of outstanding performance
- earnings results could be described as nothing short of disastrous (yet
miraculously, they're getting worse). On the flipside, the technical chart
has been curiously compelling.
For starters,
despite the terrible numbers (Maui Land & Pineapple lose $12.11 per
share this year), shares of MLP have remained flat at $6.50 over the last
several months, hovering above last year's lows in the mid-$5 area. Much
less apparent are the handful of strong accumulation days during this otherwise
dead period.
What's it all
mean? Perhaps nothing. Or, maybe it's a case where the worst case scenario
is already fully baked into the share price. If that's the case, then the
risk/reward ratio is actually quite favorable.
 Idex
Corp. (IEX)
Idex Corp. was
actually one of the stocks that popped up from one of our proprietary scans
in search of a specific technical scenario. In other words, this is a chart-based
optimism.... though a good one.
The overall
uptrend is framed clearly on our chart. There's been plenty of ebb and
flow, but the gains have been logged pretty consistently since January.
Our only footnote would be a suggestion that you make sure you buy IEX
when it's closer to the support side of the bullish range than it is to
the resistance side.
The underlying
fundamentals for this machinery maker could be better, but could also be
worse. The current P/E of 22 and the forward-looking P/E of 17 are in line
with its peers.
 Global
Cash Access Holdings (GCA)
With the anticipated
earnings of $0.72 per share this year and $0.80 per share next year, and
given that Global Cash Access Holdings has been profitable and beat expectations
in three of its last four quarters, this is clearly a value play. The fact
that the chart has made a nice, slow curl higher over the last two weeks
after getting crushed in August is just fortunate timing.
Global Cash
Access Holdings provides credit and cash advance services to the casino
industry.... a double whammy in most regards, since both industries have
seen sharp drop-offs in demand. Yet, the company seems to have shrugged
off the ill effects - sales and income were up last year, and will be up
again this year.
Ideally, the
stock will break above resistance at $6.58 soon and return to an appropriate
valuation.
 Insulet
Corp. (PODD)
We like the
overall uptrend here, though the last several days have been a little nerve-wracking.
A couple of gaps on the daily chart (which you can't see on our weekly
chart) have left the stock nowhere to go but a little lower from current
levels. That's a temporary situation though, if the surge in volume is
an indication of how the majority of the market is thinking now.
The key to any
longevity will be PODD making a nice solid base above resistance at $11.80,
which could take a few weeks to fully materialize.
The risk to
the whole shebang is results..... Insulet doesn't really have any to brag
about. That's not a total deal-breaker, since plenty of stocks can and
have moved higher on terrible earnings results. It doesn't make it any
easier though. Maybe this is one to put on the backburner.
 GLG
Partners Inc. (GLG)
Were it not
for Wednesday's strong rebound, a mare glance at a chart of GLG Partners
would turn you off this stock. The bounce, however, at least prompted our
interest.
What kept our
interest is GLG Partner's earnings outlook. Don't look for any net profits
this fiscal year, but what most of the market might be missing is that
the company has returned to measurable operating profits (not net profits)
last quarter; analysts were looking for 4 cents per share, and GLG posted
a 26 cent per-share profit. A repeat of the feat could be a monster catalyst.
Odds are good
that investors are still skeptical of anything to do with hedge funds...
GLG's bread and butter (they're a hedge fund sponsor). As long as investors
are capable of greed and seek excess returns though, the hedge fund industry
will remain viable. This one's a dark horse, but the fact that nobody else
is touching it may be a great sign.
 Healthspring
Inc. (HS)
Healthspring
shares have already knocked horizontal resistance at $15.07 out of the
way. If the diagonal resistance line currently at $15.80 can be hurdled,
HS should be fully unleashed. So yes, this is a chart-based (momentum)
play that was found as a result of the same proprietary scan that dug up
Idex.
That being said,
don't get too presumptuous with Healthspring. The weekly chart looks solid,
but the daily chart reveals a few more struggles. Plenty of sellers have
emerged as HS hit new highs last week, which may thwart this effort before
it gets any real traction.
If the resistance
at $15.80 can be cracked once and for all, then the next nearest meaningful
ceiling line lies at $22.50. That will be our target, if and when.
That's it for
today, though six ideas is more than enough to keep you busy if you want
to do any additional research or set up trade triggers and watchlists.
On that note,
be advised that we intend to update and post our potential-trade watchlist
in the blog soon. Those names, while there are more of them, may or may
not be as solid as the stocks we looked at above... but there are more
of them. We've seen many of our watchlist stocks from the past turn out
to be major winners all the same, so look for that blog post soon. .
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Updated: 8:15 pm PDT (03:15 GMT), November 2, 2010
