...and M&A and Trading Plays
12/23/2005 12:00 am EST
Other leading advisors like more specialized firms in the investing sector. Bernie Schaeffer likes M&A specialist Lazard; Joe Sunderman and Melvin Pasternak both pick data provider, FactSet; Jim Collins like Investment Tech; Dennis Slothower trades TradeStation.
(For more on the advisors cited below, please click on their photos.)
"Lazard (LAZ NYSE) is the latest buy in the Power Stocks service from Bernie Schaeffer . "Lazard offers an array of financial advisory services regarding mergers and acquisitions, and restructurings. It is estimated that merger and acquisition activity in 2005 was up 30% to its highest level in five years, and is expected to continue to grow at a healthy pace next year. LAZ has been a strong technical performer. Since the stock went public in May, it has gained over 26%. The 3.3 million shares shorted represents more than 10% of the stock's float.
"We believe high pessimism on a strong technical and fundamental performer can be a sign of future price strength as those who are against the stock begin to turn positive and begin buying. Wall also Street remains skeptical. Of four analysts that cover Lazard, two have ‘hold’ ratings on the stock and one maintains a ‘strong sell’ rating. Any upgrades could spur the stock higher. Buy up to 32.50 with a stop loss at 28.83. Our target for this trade is 39.60."
FactSet Research Systems (FDS NYSE), which supplies economic and financial data and analytics to the investment community, is the latest featured recommendation from Joe Sunderman, in The Daily Contrarian. "Technically, the stock is bouncing off its ten-day and 20-day moving averages. Boosting our assessment of the stock are quite a few sentiment factors. First, only five brokerage houses track the shares, with a mere two ‘buys’. Light open interest is also a sentiment signal that not many track these shares, which is a positive development.
"The company just reported earnings. For the quarter ended November 30, 2005, revenues increased to $89.7 million, a 21.1% improvement over the prior year. Per-share earnings of 38 cents, which exceeded year-ago figures by a nickel and topped Wall Street estimate by three cents per share. We believe on the heels of this earnings release, the security has further upside potential. The short interest on the stock stands at 15 times average daily volume, leaving more short-covering fuel to push this stock toward our target of 43.20. Traders should raise the stop-loss on this position to a trade below 38.50."
"Technically, FactSet has formed an enormous base this year,"
notes Melvin Pasternak in StreetAuthority Swing
Trader. "The stock hit a high of $39.27 in December 2004, only to lose
more than a third of that value by April. From there, it rallied into the high
$30's before retreating. The stock recently broke out and closed above the $40
mark on volume about 50% above normal daily levels. This suggests that FDS is in
a solid advance, but is not yet far extended. The stock has also broken out on
relative strength, which has likewise created a year-long base. The shares should
have support in the high $30's if this advance stalls. My target on FDS is
a relatively modest $44.95."
"Investment Technology Group (ITG NYSE) is a specialized brokerage firm that partners with clients globally to provide innovate solution spanning the entire trading process," says Jim Collins, in Listed Insight. "A pioneer in electronic trading, ITG has a unique approach to trading that combines pre-trade analysis, trade execution, and post-trade evaluation to provide continuous improvements in trading and cost efficiency. In the third quarter, net income was $15.6 million, 47% higher than the year ago period. Earnings were $0.37 per share, an increase of 49%, and three cents above expectations. The stock has been on a strong run, having more than doubled since April. The stock receives an ‘A’ for accumulation and distribution and has a relative strength rating of 98 (out of 100)."
"TradeStation Group (TRAD NASDAQ) operates as an online brokerage firm," notes Dennis Slothower, editor of Stealth Stocks. "The company offers its TradeStation electronic trading platform that enables customers to design, test, and monitor their own custom trading strategies and then automate them with direct-access order execution. This platform also offers streaming equities, options, futures, and forex market data; manual or automated direct-access execution of equities, options, and futures trades; and manual execution of forex trades through a third-party platform. The company maintains a position on our latest list of stocks that we believe have the potential to double in price over the coming five years."