Options In Focus: Cognizant of a Handle? and Banks Bounce Despite Toxic Asset Shadow

Cognizant Technology, an Indian IT services firm and NASDAQ 100 component is currently boasting a six-to-seven week-long cup-shaped base with handle that being carved out around its prior all-time-highs of 47.78 set back in February 2007.

{loadposition in-article}

In today session shares were doing a good job of once again leading. With the S&P 500 higher by about 0.8%, CTSH was adding 2.00% to a level of 48.15 on volume tracking slightly above average. With consolidation highs of 48.34 set seven days back, a proper buy point, although unconfirmed by the broader market as of this writing, could exist for some investors.

For those that might be interested, Cognizant does maintain liquid options. Volume averages 1,500 contracts per day and individual bid / ask spreads are tight enough to consider verticals and calendars and of course, a simple outright if the price is determined compelling enough. [Read the full article]

The congressional oversight committee of the Troubled Asset Relief Program warned earlier this month of the potential for $300 billion in commercial-loan failures through 2014.

The Federal Deposit Insurance Corp.’s quarterly banking report, released Tuesday, showed rapid growth in the number of troubled banks, and the largest drop-off in consumer lending since the beginning of World War II.

Those kinds of data have helped keep IBD’s seven banking groups mired low in the industry rankings. But banks have made a strong showing in Fidelity’s top five industry funds in year-to-date performance.

And Monday, amid all the gloom, analyst John McDonald of Sanford Bernstein raised his rating on PNC Financial Services (PNC) to outperform and boosted his 12-month price target to $64 a 20% increase from where PNC ended Monday’s session.

McDonald’s note described PNC’s capital and reserve positions as competitive with those of much larger banks. [Read the full article]

So let’s take a look at the 12 dividend stocks in the Dow that are delivering a yield of at least 3%. We’ll peg their median performance in earnings and sales growth over the past 15 years. How many are expected to meet or beat that mark in each of the next two years?

Coca-Cola (KO) looks like a winner again after a 3% sales decline in ’09  the first since ’02. Revenue is expected to grow 6% in 2010. Meanwhile, the Street expects earnings to ramp up 11% and 10% in 2010 and 2011.

Over the past 15 years, median growth was 10% for EPS and 4% for sales. Its dividend yield is 3.2%.

Chevron (CVX) also looks like a winner, though its earnings and sales history is more erratic than Coke’s. Analysts see 59% and 27% earnings growth in 2010 and 2011. Sales are expected to grow 17% in 2010.

Kraft Foods (KFT) passes a shorter test because it’s a 2001 spinoff. Analysts expect Kraft to grow earnings 3% and 11% in 2010 and 2011 vs. a nine-year median of 3%. [Read the full article]

If institutional investors which account for most of the market’s volume aren’t buying your stock, how will those shares find the needed fuel for standout gains?

You need to find out more than just how many funds are buying shares and how many shares they’re buying. You must know which funds are buying.

In short, you want the funds run by the Street’s most successful portfolio managers on your side.

A little digging finds some highly rated foreign stocks or American depositary receipts that the smart money has bought.

Brazil Foods (BRFS) is one such stock that has made the portfolio of some well-respected funds. You’ll find shares of the Brazilian producer of specialty meat, frozen meat and processed dairy products in the portfolios of Fidelity Contrafund and Fidelity Advisor New Insights Fund, for example. [Read the full article]

You may also like...