Tonight’s scan has the following criteria
- Market Cap under 200 million
- Sector – Technology
- PE under 25
- F/PE under 25
- PEG under 1
- Debt / Equity under 1
This resulted in (19) companies shown on the input section below
The final sort has LCRX (a JXM favorite from last year) AEIS (new interest) and some others like ACIA which will be added to the watch list.
LCRX has been a stud, up over 40% YTD and still chugging along. Not going to spend much time on this name as we have owned it before and the setup today isn’t something we are that excited about but for the long-term investor, this name has it all.
AEIS takes home the #2 spot on tonight’s scan. One could make a case that it’s as strong as LCRX because it hits on all cylinders while having a tremendous rules score. The thing about level 5 (rules) that makes this one very important is that these ratios (44 to be exact) are hand-picked by the experts in the industry, set with specific ranges for each ratio using back tested weights of importance. Its one of the strongest standalone levels and one of my favorites
Lets take a look at the monthly chart of AEIS. $77.44 was the top in 2000 and recently it has broken to the upside (currently trading at $78.65). This could be classified as a 17 year base.
Next we have the daily chart of AEIS. The first and probably only necessary thing that stands out is this TREND is your friend. Its pretty remarkable how clear the uptrend is here with only a few small draw downs and nothing really below the 50 day moving average. One can try to wait for another 50 day touch or one can set it and forget it over 77.44 (closing basis) as they would probably try and shake a few out first.
The only other name of interest on this scan is ACIA. What I like about this name is the only real thing that is holding this back from a top 3 rank is the technical score of 38%. If you don’t mind stocks in a downtrend, that could be ignored here because everything else seems to be solid to great. The valuation has really improved as price has come down. You also have a superior rules score combined with strong growth. The fundamentals are fine as well so if you combine all these factors, you have enough of a strong company to start reversing higher pretty soon.
Lets take a look at the daily chart, price is currently in a very long and steady falling wedge. These setups are bullish but not until price breaks north and today we are getting closer to the APEX. You can also see a false breakdown recovery on nice volume (accumulation) with bullish RSI divergence. Over $49.65 is when we will take a position and potentially add to it on any clean break out of the wedge.
To summarize the above, we have liked LCRX and still do but not looking at it today for a new position but it could be a long term hold. AEIS is a favorite at the moment and we will be taking a long position with a close eye on how price handles the old high of $77.44. We also added ACIA to our watch list and will long the name once it clears $49.65.
Hope you enjoyed our watch list scan tonight. Free free to email us any questions at JXMFinancial@gmail.com or visit us on Stocktwits at JayStrauss.
Update – 5/15/2017
I got a valuation alert for ACIA so it required further review. Below shows the now and then (left is today) (right is 5/11) Now that earnings are out of the way alot of the metrics has time to update.
Significant change in PE to F/PE ratio. Now showing negative growth.
The 5 yr growth rate actually dropped to -3.2% vs the 53.2% recently held.
These new metrics affect the LTV, margin of safety and fair value score so valuation now shows a concern. EPS next year also dropped from 3.76 to 2.96.
So while price is still looking bullish, this could just be an oversold bounce.
We will continue to watch the positive RSI divergence along with how price reacts at the APEX of the falling wedge. If this breaks out on heavy volume, valuation would obviously not be a concern for most.