Author Archives: Scalper1

Sluggish Retail Sales? Don’t Tell That To Specialty Retailers

Retail sales might have been sluggish in March, but don’t tell that to the Retail-Specialty industry group which has been working its way higher in IBD’s 197 industry group rankings. The group outperformed again Wednesday, rising about 2%. Headed into the session, it ranked 26th, up from No. 99 three weeks ago and No. 146 six weeks ago. The outright leader in the group is Ulta Beauty ( ULTA ), one of a select group of stocks to achieve IBD Sector Leader status due to outstanding fundamentals, among other things. Over the past eight quarters, year-over-year sales growth has averaged just over 21% — impressive for a company with a market capitalization approaching $13 billion. A strong earnings report fueled a bullish gap for the stock on March 11. The stock traded sideways after that, staying in a buy range from a 188.58 buy point. It’s extended now after gapping up again April 8. It may be too late to buy Ulta, but three other names in the group are near buy points as they set up in bases. Sally Beauty ( SBH ) is in the same business as Ulta. While Ulta has a big presence in malls across the U.S., Sally Beauty locations are more prominent in strip malls. In terms of store locations, Sally operates more than 4,800 stores worldwide, compared with nearly 900 locations for Ulta. Despite more locations, Sally’s market capitalization of $4.6 billion is much smaller than Ulta’s at nearly $13 billion. Its fundamentals story isn’t as compelling, either, with a five-year annualized earnings growth rate of 11% and sales growth rate of 5%. Still, Sally Beauty is working on a long cup-with-handle base with a 33.03 buy point. Arts and crafts retailer Michaels ( MIK ), with a Composite Rating of 91, is working on a long cup-with-handle base with a 28.89 buy point. On the weekly chart, the handle formed during the week ended March 25. Michaels shows four straight quarters of double-digit earnings growth, but single-digit sales growth leaves something to be desired. That said, sales growth accelerated when the company reported fiscal Q4 results in March. Sales rose 5% to $1.68 billion, up from 3% growth in Q3. For the current quarter, sales are expected to accelerate again, rising 8% to $1.17 billion. Last week, industrial auctioneer Ritchie Bros. Auctioneers ( RBA ) said it sold more than $1 billion worth of equipment, trucks and other assets in the first quarter, up 6.8% from the year-ago period. It has climbed to within 9% of a 52-week high as it works on the right side of a long consolidation. Earnings and sales growth declined in the latest reported quarter, but a Composite Rating of 87 is helped by solid annual pretax margin and return on equity in 2015. To its credit, Ritchie Bros. boasts a couple of top-notch fund sponsors: Primecap Odyssey Aggressive Growth Fund ( POGRX ) and T. Rowe Price New Horizons Fund ( PRNHX ).

After Hours Most Active for Apr 13, 2016 : PBH, PFE, BAC, CME, WLL, GWB, QQQ, MSFT, CNL, YHOO, INTC, AAPL

The NASDAQ 100 After Hours Indicator is down 1.27 to 4,553.45. The total After hours volume is currently 31,524,106 shares traded. The following are the most active stocks for the after hours session Prestige Brand Holdings, Inc. ( PBH

First Solar, SunPower To Withstand SunEdison Inferno: Guggenheim

First Solar ( FSLR ) and SunPower ( SPWR ) stocks flashed Wednesday after a Guggenheim analyst said rival  SunEdison ‘s ( SUNE ) “collapse” wouldn’t torch the duo and their yieldco 8point3 Energy Partners ( CAFD ). Just ahead of the closing bell on the stock market today , SunPower stock was up about 3%, leading First Solar stock which was up about 2%. Shares of 8point3 Energy Partners trailed, up 0.5%, ahead of beleaguered SunEdison stock, down about 7% and trading below 40 cents. Broadly, solar stocks lit up Wednesday. IBD’s 21-company Energy-Solar industry group was up 2% in late-afternoon trading. SunEdison stock has plunged 99% since its 2015 high on July 20, when it announced its plan to acquire Vivint Solar. Residential installer Vivint Solar scrapped the sale in December, citing SunEd’s lagging financials. Last month, SunEdison’s yieldco TerraForm Global ( GLBL ) distanced itself from massive project developer SunEd, which could be headed for a bankruptcy protection filing soon , according to reports. SunEdison may be in technical default on $725 million in second-tier loans unless it negotiated extensions with creditors. ITC Extension A Boon But First Solar and SunPower won’t feel that heat, Guggenheim analyst Sophie Karp wrote in a research report. Karp initiated coverage on First Solar stock with a buy rating, ahead of SunPower and 8point3 Energy Partners stocks, which have neutral ratings. Congress’ extension to the key Investment Tax Credit (ITC), which underpins the U.S. solar industry, will prove a boon for large-scale developers like First Solar and SunPower, she wrote. Residential installers like SolarCity ( SCTY ) and Sunrun ( RUN ) won’t see the same benefits. “We do not think that residential developers will be main beneficiaries due to the fiercely competitive nature of their business,” she wrote. “Despite operating in a fragmented and competitive market (large-scale developers) are still much better protected and will be able to retain more benefits.” But SunPower might be too internationally stretched to reap the ITC extension benefits as fully as First Solar, Karp wrote. Prepping for the expected expiration Dec. 31, 2016, SunPower invested heavily in international expansion. “Given that the ITC extension has changed the calculus domestically, we wonder if SunPower is now too thinly stretched to take advantage of this backdrop,” Karp wrote. Her price target on SunPower stock is a 21. She lists First Solar stock with a 77 price target. SunEdison’s collapse will likely lead First Solar and SunPower to bring their financing back to basics, Karp wrote. Project financing will be available to reputable players at attractive rates, but yieldcos will likely continue to be shut out of the market. Meanwhile, tech innovations are driving solar costs down and storage is on the horizon, Karp wrote. Storage is often seen as a pie-in-the-sky innovation to cut solar customers’ reliance on utilities at night and on cloudy days.