Stocks in the News is produced by Ransom Notes Radio and Goodfellow, LLC. Crista Huff manages Goodfellow LLC, a website that recommends outperforming stocks using fundamental and technical analysis.
Stock number one is:
DaVita HealthCare Partners Inc., (SYMBOL: DVA) and the headline says:
Rebasing Continues a String of Negative Surprises for DaVita – Citi Research
Medicare announced that reimbursement rates for dialysis may fall significantly in 2014, alarming investors in DaVita HealthCare, the largest U.S. dialysis provider. “Monday’s announced Medicare cut for dialysis services far surpasses our worst fears,” reports Citi Research. Buy-side analysts were expecting an approximate 2% cut, but the net cut proposal came in at 9.4%.
Watch for DaVita's earnings estimates to fall towards a no-growth scenario in 2014.
Berkshire Hathaway owns 14% of DaVita stock, causing recent speculation of a buyout offer, which may provide some ongoing support for the stock price. The chart is bearish, with support at $115.
Our Ransom Note trendline says: STAY ON THE SIDELINES.
Stock number two is:
Apple Inc., (SYMBOL: AAPL) and the headline says:
Tech Stocks Signaling Sustained U.S. Growth -- Bloomberg
“Shares of technology companies are rallying as investors see capital spending for their products strengthening along with the economy,” reports Bloomberg.
Apple shares are rallying with news that the company filed with the Japan Patent Office in June to trademark the term "iWatch". The company is believed to be developing a digital wristwatch, which could provide new growth opportunities.
Apple’s earnings estimates are holding steady; projected to fall 10% this year. With a PE of 10.3 and a dividend yield of 2.98%, there’s limited downside at this point. The trading range is firming up between $385 and $465.