09
Feb
Author: FreeTradePicks.com
Posted: February 9th, 2010 at 11:56 pm EST

Though I still contend there’s more downside to play out before the ultimate bottom is hit, I’m starting to see more than a few interesting stocks pop up for technical-strength reasons. We’re going to add the two most interesting ones to the watchlist…. LCA-Vision Inc., and Insight Enterprises, Inc. Here’s a quick look at both.

Insight Enterprises, Inc.

Insight Enterprises, Inc. (NASDAQ:NSIT) managed to resist the market-wide selling last and took advantage of the semi-bullish environment this week. At this point in time, the would-be buyers need to get off the fence.

On the technical side, Insight Enterprises managed to push back above its 50-day moving average line in late January. Moreover, the stock tested that line – successfully – as support over the last three weeks… gaining 7.5% in the process. In comparison, the broad market is down 2% for the same timeframe. The relative strength alone should be compelling to bulls; the action at the moving averages says the time is right.

Insight Enterprises, Inc. (NASDAQ:NSIT)

Insight Enterprises, Inc. (NASDAQ:NSIT)

On the fundamental side, the strong chart makes sense.

Insight Enterprises, Inc. is a loser on a trailing-twelve month basis, but the company has been profitable in its last tree quarters. A terrible quarter four quarters ago is dragging down the whole year, but many investors who use full-year ’sort and scans’ don’t realize that once the company releases its next earnings report, that loss of $3.76 per share in the second quarter of 2007 will no longer be part of the trailing-twelve months; the TTM number should then be a nice $0.93 per share.

At a plausible EPS estimate of $1.04 for 2010, NSIT really is underestimated and undervalued at its current price.

LCA-Vision Inc.

It’s been a long-time in the coming, but LCA-Vision Inc. (NASDAQ: LCAV) is actually trending higher now. In fact, a series of technical buy signals fired following Tuesday’s big 8% rally. Among the key signals include a simultaneous cross back above the 20, 50, and 200 day moving average lines.

Though slightly overbought in the short-term, and with a suspicious lack of volume behind the intra-day swing, LCAV still represents an enormous long-term rebound opportunity now that the paradigm shift is in place.

Note that LCA-Vision will likely meet turbulence near the resistance level around $8.00. Waiting for a cross above that mark would be wasted time, so it’s not advised to hold off on a purchase until that hurdle is crossed. Just know that the area could be an obstacle when the time comes.

LCA-Vision Inc. (NASDAQ: LCAV)

LCA-Vision Inc. (NASDAQ: LCAV)

The most advantageous aspect of this chart is the incredibly slow pace at which the reversal happened… a slow, bowl-shaped move. Given that rebounds tend to mirror the selloff, investors can reasonably expect LCAV to slowly continue building momentum over the next several months.

As far as corporate performance is concerned, that’s LCA-Vision’s Achilles’ heel. For 2009, the company lost $33.2 million, or $1.79 per share. That’s disastrous in comparison to the loss of $6.6 million, or 36 cents per share, in 2008. Yet, the Q4 ‘beat’ offers a glimmer of hope for a turnaround.

The estimated loss of $0.73 per share for 2010 still stands, but that clearly didn’t stand in the way of Tuesday’s buying; perhaps the buying will become more deserved as the year wears on, and Tuesday’s bulls were acting preemptively.

VN:F [1.8.0_1031]
Rating: 9.3/10 (3 votes cast)
Charts of the Day: Adding NSIT, LCAV to the Watchlist9.3103
More on this topic (What's this?)
Shareholder Rights? Not So Much
Double Vision
When Price Meets Value
Read more on Insight Enterprises, LCA-Vision at Wikinvest
  • Share/Bookmark


Leave a Reply

Copyright © 2010 FreeTradePicks.com - This site is often given financial compensation for endorsements and links to other sites.
To use this site, you must agree to our Terms of Use & Privacy Policy.