FTI: Corporate Fraud Breakout
01/17/2003 12:00 am EST
Leo Fasciocco, through his online service,Ticker Tape Digest, seeks stocks under strong accumulation that are either poised for a technical breakout or have just broken out of a base. (For his short sales, he looks for distribution patterns and technical breakdowns.) His latest breakout candidate is a beneficiary of corporate fraud and increased litigation.
"FTI Consulting (FCN NYSE), which provides litigation support and consulting services, is our latest featured breakout stock. The issue has been one of the strongest stocks over the past two years, having soared from 8 to 43. The stock has recently broken out from a six-month base and has hit a new high. The sensational run up appears to have more to go.
"FCN provides expert testimony through its litigation support and consulting services, which range from forensic analysis, jury consulting, and courtroom visual aids to accident reconstruction, fire investigation, and consulting on intellectual property and scientific issues. The company also provides financial services such as forensic accounting and fraud investigation. The company has 2,500 clients. They include corporations, law firms, banks, and insurance companies. Insiders were buyers in early January at prices around 40. President Stewart Kahn bought 75,000 shares via stock options.
"The stock’s strong showing is due to very good earnings. For fiscal 2002, we are looking for a 76% jump in profits to $1.48 a share. Turning to 2003, we project a 43% surge in profits to $2.11 a share. Overall, we believe FCN is an excellent breakout stock. We suggest that aggressive investors take a full position on the current breakout, while more conservative investors can scale-in to positions. We target a move in the stock to 52 to 54 within the next few months. A protective stop can be placed near 40.70."
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