Welcome to Ransom Stocks In The News, where the headline meets the trendline.
Stocks in the News:
Stock Number One: American Pacific Resources (Symbol: APFC)
And the headline says: American Pacific considers selling itself –sources- Reuters
“One of the sources said that the chemical company was currently in advanced talks with bidders on a sale and could announce a transaction in the near future,” reports Reuters. “It has hired KeyBanc to advise on the sale, two of the sources said.”
AMPAC sells chemicals both domestically and internationally.
We’ve spoken about chemical companies before. The company is trading near a 52-week high at about $58.95. The 52-week low was $11.
There are very few analysts following this company thus there are a few estimates out there. Earnings of grown substantially this year up over 80% year-over-year. Future earnings are expected slow to about 5 ½%.
The company trades about 14 ½ times it’s trailing PE, and about 23 times its future PE.
There’s likely a premium built into the stock because of the acquisition rumors.
Our Ransom Note Trendline says: Sell AMPAC.
Stock number two: Rent-a-Center(Symbol: RCII)-
And the headline says: Rent-A-Center Breaks Below 200-Day Moving Average – Forbes
Writes Forbes: “In trading on Friday, shares of Rent-A-Center Inc. (NASD: RCII) crossed below their 200 day moving average of $36.95, changing hands as low as $35.79 per share. Rent-A-Center Inc. shares are currently trading down about 3.4% on the day.”
Rent-A-Center is currently trading at about 12 times trailing earnings in about 10 times future earnings. Analysts say that the companies enjoyed about a 9.3% five year average annual growth rate and that going forward that should be little changed.
This is a company that bears looking at once it settles into a trading range. Generally speaking it’s in advisable to buy a company once it’s broke through it’s 200 day moving average.
Our Ransom Note Trendline says: Avoid Rent-a-Center
Stock Number Three: Taser International (SYMBOL: TASR)-
And the headline says: TASER announced before the open that it lowered prices for EVIDENCE.com and AXON police cameras- Briefing.com
Writes Motley Fool: “The maker of the …electronic weapon said it would drop prices on its Evidence.com and its Axon Flex cameras. The Axon Flex price tag was slashed nearly in half from $949 to $499, while Evidence.com subscriptions will now start at just $9.99/month. Taser cited the ‘tight budgetary environment’ for the move, explaining that the new pricing addresses the challenges of affordability and predictability that law enforcement budgets face.
This move no doubt changes earning expectations for the company. Earnings estimates have moved up recently, and in September the company came in ahead of earnings expectations.
Watch this development.
Our Ransom Note Trendline says: Avoid Taser International