Welcome to stocks in the news where the headline meets the trendline.
Stock Number Corning (SYMBOL: GLW)
And the headline says: Corning (GLW) Soars on Joint Venture Buyout, Buyback- The Street.com
“Corning, a manufacturer of liquid crystal display (LCD) glass, announced it has entered into a series of strategic transactions with partner Samsung's Display business,” writes the Street, “including purchasing the latter's 43% share in a joint venture, Samsung Corning Precision Materials (SCP). Shares soared on the news, up 14.9% to $17.63 as of 10 a.m. EDT, with 16.9 million shares changing hands, far outpacing its three-month average daily trading volume of 12.8 million.”
The company has a trailing PE 13 times earnings, and a trailing PE of about 12 times earnings, with a forward dividend yield of about 2.7%.
There’s a reason for the low PE, however: the company’s earnings haven’t been growing.
That could change with this acquisition. Corning’s a company to watch, just not ready to buy.Expect resistance at $16 and support at $14.
Our Ransom Notes Trendline says: Avoid Corning
Stock number two: Broadcom. (SYMBOL: BRCM )
And the headline says: Juniper, Broadcom among decliners in tech swoon- MarketWatch
“Broadcom Corp. was downgraded to a neutral rating by Wedbush Securities on Wednesday morning,” reports MarketWatch, “following the chip maker's third-quarter results and outlook from the previous afternoon. In a note to clients, analyst Betsy Van Hees noted that the company's disappointing outlook for the fourth quarter "was much worse than we expected primarily due to an even choppier mobile market from intense competition in 3G, inventory corrections, and connectivity share loss."
The company has a big price-to-earnings ratio. And analysts have been downgrading earnings estimates over last several months. Well the companies enjoyed hot growth of Route 25% annually, analysts expect that to slow down in the out years.
Look, tech is hot right now, and Broadcom is a loser. It might not always be a loser, but it is today.
Our Ransom Note Trendline says: Sell Broadcom
Stock Number Three: Apollo Group (SYMBOL: APOL)
And the headline says: Corning, Apollo Group Spike - Investors Business Daily
“Apollo Group (APOL) spiked 17% after fiscal Q4 earnings, reported late Tuesday, were more than double analysts' expectations,” says IBD. “Revenue slipped 25%, not nearly as far as forecast. The company lowered full-year revenue guidance for fiscal 2014 that was below analysts' projections. The stock has been climbing off a March low, after diving more than 70% in the prior 10 months.”
Apollo, which sells education programs at the college level, has had a tough go of it. Remember those “Obama want you to go back to school” ads?
Yeah, so does Apollo.
This news could be the beginning of a turnaround.
But you have to ask yourself: you want to buy a company where revenue has slipped 25%?
Well do you… punk?
Oh and here’s the good news, apparently: 2014 is gonna be worse than we thought.
Sell into strength here.
Our Ransom Note Trendline says: Sell Apollo Group.