WallStreet Dynamic

The ES closed the week down 28.5 points or 1.36%  from last weeks close.  Several events triggered a sell off during the begging of the week.  The ES was able to recover some of the loses.  Two false breakouts to the upside gave the bulls a brief moment of hope.  CB Consumer confidence beat estimates and non-farm employment change was slightly worse that estimates.

We are going into next week…

HRL reports 3rd quarter earnings on 8-19-15.  Current estimates are .55 EPS and growth of 7.8% QoQ.  Annual growth forecasts for the current year are coming in at 13.9% growth which out paces the industry average of 8.3%  HRL has reported 3 positive earnings surprises over the last 4 quarters.  Average positive surprise is 4.8%  On a troublesome note Hormel Foods received 3 downward estimate…

LEG reports earnings on 7-30-15.  Current estimates are for a 12.5% increase in EPS and 2.7% in sales.  Current year guidance is coming in at 2.07 a share and 16.3% growth.

LEG’s multiple is 61.1 which is higher than its industry and the S&P 500, both coming in at 30.4 and 26.5 respectivetly.  Currently LEG’s P/E multiple is trading at a 100% premium to the S&P 500.  I would like to see some…

NE reports earnings on 7-28-15.  Current estimates are for a decline in EPS growth by -46.2%.  Last quarter EPS growth came in at 20%.  3 year EPS growth rate is 2%.  These are dismal numbers.

Noble corp is trading at a premium to its peers, TTM multiple is 517 which is well above its industry and peers.  NE’s multiple is also well above its 5 year average coming in at 20.4  Currently growth…

Currently CL is trading within the fair auction zone.  Bullish directional bias based on price action remains in play at this point.

Oil still has weak fundamentals, a few key points are

rising products stocks will depress refining margins

current supply/demand will lead to only gradual decline in elevated inventories

US rig count curtailment isn’t enough to put oil production to downward trend.

HZNP had a very good quarter report.  EPS growth was up 62% and sales growth was up 118%.  HZNP next reports on 8-7-15.  Estimates for EPS are 11.6% and sales 93%.  Current forward P/E is coming in at 16.3 which is a conservative number for such high growth estimates.  Average forward P/E of competitors is 20.5.  Clearly based on the forward multiple HZNP is slightly undervalued and may present a…

S&P 500 - Notes and Research

All sectors finished the week in positive territory except 4.  Information technology, utilities, telecommunication services, and energy finished the week lower with the energy sector leading the pack to the pits.

Financials finished the strongest up 1.13% for the week.

Among the top industry movers we have – Construction materials up 2.51% and Banks up 2.16%

The S&P has been stuck in a…

NXPI - Notes

NXPI reports 2nd quarter earnings on 7-21-15.  Current estimates are for EPS growth of 26.6% and sales growth of 12.2%.  Current multiple is at 43, which is above sector and industry averages.  Trailing P/E of NXPI is trading at a 40% premium to its 5 year average and 100% premium to the S&P 500.

I would like to see some multiple contraction possibly getting the P/E down to historic levels around…

Skyworks Solutions – Notes & Research

SWKS reports 3rd quarter earnings on 7-15-15.  Current estimates are for growth of 51.8%.  If these estimates hold true this will be another solid earnings report from SWKS.

RoE is coming in at a strong 22.6 which is well above its 5 year average of 14.8 and sector average of 10.6

The P/E multiple is on the high side at 29.7 TTM.  Industry average P/E is 17.6.  I would like to see a more fairly…

ULTA – On My Radar

ULTA reports 1st quarter earnings on 5-28-15.  Current estimates are for EPS growth of 20.8% and sales growth of 18.5%.   Long term growth 5 years out is coming in at 20% which is above its sector and industry averages.

The fundamentals on Ulta Salon Cosmetics are pretty strong.  Sales growth and EPS growth are both solid with double digit QoQ growth over the past year.  I am a little concerned…

Avago Technologies – Notes & Analysis

AVGO reports earnings on 5-27-15.  Estimates are for a very high 135.3% growth QoQ.  Last quarter reported EPS had 149% growth.  Sales growth next quarter is estimated at 132%.

RoE is on the low side coming in at 15.5.  5 year average RoE is 21.82.  I am not please with this low number.  Despite its low RoE to historic levels, AVGO is still out performing its sector’s RoE coming in at 10.69

AVGO’…

VRX – Notes on this pharmaceutical company

Earnings will be reported on 7-29-15.  Current estimates are for growth of 28%.  Last quarters earnings and sales numbers were double digits at 34%EPS & 16%Sales.

VRX has a 17.5 RoE which is in the upper levels of its historic range.  This is also a very liquid stock with several trading options open to astute traders.

Trailing P/E is coming in at 83.44

Sector P/E 35.73

Industry P/E 31.20

Current…

S&P 500 – Technician’s Notes

I have put together some brief technical notes on the chart.  Currently the uptrend is “Under Pressure”  We need to have a close now above 2125 and sustain it for at least 3 sessions before I would recommend any long positions in this market.

The market is still biased to the downside.  Bearish price momentum.

Price is currently chopping around its 50-SMA coming in at 2090 as well as finding…

CRM Notes & Research – Salesforce

CRM reports 1st quarter earnings on 5-18-15.  Current estimates are for growth of 27.3%.  Sales growth is estimated to grow at a 22% clip.  CRM’s forward P/E multiple is trading at a significant premium to its industry and the S&P 500.  Growth forecasts currently are not supportive of such a high multiple.  CRM is not fairly valued currently.  PeG is coming in at a very high 3.68 which is at a…