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Market Stance: BULLISH (since February 22, 2016)
* An average of managed accounts, net after all commissions and fees.
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* Buy prices shown are net after commissions and fees.
Today, Monday, April 4, 2016, I bought EW, for both client and my personal accounts.
Edwards Lifesciences Corp. provides products and technologies to treat structural heart disease and critically ill patients worldwide.
This stock is a component of the S&P 500 Index.
Here's why I bought this stock:
+ News: Yesterday, after the close, the company announced results of a clinical trial of a replacement heart valve. The new valve was shown to be clinically superior to surgery.
+ Breakout: The stock is up sharply today on huge volume. It was also up Friday. Friday's move was a fractional breakout from a 5-week range to a new all-time high.
+ Volume spike, mostly on the buy side: As I write this, about a half hour before the close, volume is approaching 4 times the daily average, and has already set a 12-month record.
+ Positive recent sales growth. Here are the quarterly year-to-year sales growth rates from the last four quarters, in chronological order: +13%, +7%, +1%, and, most recently, for the quarter ended Dec 31, +9% to $671.1 million.
+ Excellent recent earnings-per-share growth. Here are the quarterly EPS figures for the last eight quarters:
Mar 15 vs Mar 14: 56c vs 38c Jun 15 vs Jun 14: 57c vs 44c Sep 15 vs Sep 14: 54c vs 40c Dec 15 vs Dec 14: 63c vs 53c
+ Strong and rising earnings-per-share estimates: According to recent data from First Call, the consensus earnings estimate for 2016 is $2.64, revised upward from $2.39 90 days ago (and up from 2015 actual earnings of $2.29); and the consensus estimate for 2017 is $3.05, revised upward from $2.81 90 days ago.
+ History of earnings surprises: This company has reported earnings-per-share at least a penny above estimates in each of the past 11 quarters. Most recently, for the quarter ended Dec 31, they "beat the Street" by a penny.
+ The company's industry group ("Medical - Products") is ranked #91 for relative strength out of 197 industry groups tracked by Investor's Business Daily. This ranking changes daily, and it has been generally rising over recent weeks and months.
+ The stock's 200-day moving average is rising, indicating a long-term uptrend.
I chose to buy the stock in spite of the following negative factor:
- Valuation: At 34 times next year's estimated earnings and a projected 5-year annualized earnings growth rate of 15%, the stock is somewhat pricey by my usual yardstick.
-KD, Monday, April 4, 2016
* Buy and sell prices shown are net after commissions and fees. This means that the gain/loss shown is also net after transaction expenses.
Today, Monday, April 4, 2016, I sold STMP, for both client and my personal accounts.
I sold STMP because it is trading below my stop-loss price of $108.18.
-KD, Monday, April 4, 2016
* Buy prices shown are net after commissions.
** Current prices are at least 20 minutes old.
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