Email Version, Section 2, Sunday, 11/12/2000
The SplitTrader.com Candidate Newsletter Sunday 11/12/2000 2 of 2
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In This Candidate Newsletter:
New Split Candidates
Successful Announcement Predictions for the Past Week
Expected/Likely Announcements for the Coming Week
Mondays Candidate Play-of-the-Day -See Split Run Newsletter
Split Candidate Plays - New - Updates - Drops
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NEW SPLIT CANDIDATES 11/13 - 11/17
SplitTrader.com strives to be the very best at identifying
profitable split candidates and momentum stocks. Every week we
will list those whom have made the cut. You can view the details
of these new candidates by checking out the complete profile for
each stock at the SplitTrader.com website.
New Split Candidates:
DHR Danaher Corporation
GELX Geltex Pharmaceuticals
JNIC JNI Corporation
SEIC SEI Investments Company
SHPGY Shire Pharmaceuticals
SRNA SERENA Software
Successful Announcement Predictions For The Past Week
Symbol Company Date Announced
MANU Manugistics Group, Inc. 11/08
TECH Techne Corporation 11/09
Expected/Likely Announcements For The Coming Week
Symbol Company To Announce*
ACDO Accredo Health, Inc. 11/16
AMRI Albany Molecular 11/16
MXIM Maxim Integrated 11/16
*Date expected to announce is a rough estimate. Corporate
management is not exempt from using a split announcement to buoy
the stock price if negative news (or earnings) is affecting their
stock price. Additionally, there is still the uncommon trend of a
delayed split announcement post-earnings.
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The PLAY LEGEND:
SplitTrader.com Candidate Play Recommendations.
Candidate Play-of-the-Day is our number one candidate
recommendation for the following trading day.
Updates are just that - updates on continuing plays
New plays are brand new for the newsletter.
Drops are closing plays that we feel have lost the advantage.
You will see:
Stock Symbol, Company Name, Closing Price, (change for the week)
Picked at date and Change since picked
BoD = Board of Directors meeting
ADV = Average Daily Volume
dma = daily moving average
At the SplitTrader.com website, we have comprehensive profiles
for each stock that we are playing or have played in the past, as
well as hundreds of others. Please take the time to visit the site
to view the profile of the stock(s) you wish to learn more about.
Please see today's Split Run newsletter for the Play of the Day
NEW SPLIT CANDIDATE PLAYS 11/12/00
SEIC - SEI Investments Company $90.25 (+3.81)
SEI Investments (SEIC) is a conglomerate of sorts that has
developed a strong business model around four key product lines.
The companys Technology Services consists of trust technology
and office outsourcing solutions. The Mutual Fund Services
segment provides administrative solutions to mutual funds for
third-party managers. The Asset Management division helps
individuals with their investment decisions through various
investment products. The New Business Investment division is the
companys international operation that looks for investment
opportunities abroad. A quick glance at the chart will reveal how
successful the company has been in combining each of these
divisions. Currently, shares have moved back into previous split-
levels after a 3:1 stock split back on May 5th 2000. The stock's
quick advance from $60 to $90 in just the last month has brought
a lot of trading momentum to the shares, which may be building up
for another run. On Friday, good volume of 356,000 shares and a
sharp intra-day advance to an all time highs may portend a new
run at the century mark. However, well still need a close above
the all time high of $90.75 to signal the breakout, so watch for
good volume to accompany a higher close before opening a
position. On the flip-side, well expect initial resistance at
$90 to be followed by a stiffer base at $88, bolstered by the 5
and 10-dmas of $88.39 and $87.78, respectively. Further down the
chart, the recent consolidation base near $85 should offer good
support ahead of our stop at $84. Use sharp bounces from the
support to signal low-risk entry points and consider using
strength in the Banking Index (BIX.X) to confirm buy points.
Picked on November 12th @ $90.25
Change since picked 0.00
NEW MOMENTUM PLAYS 11/12/00
RE - Everest Re Group $61.25 (+7.06)
Insurance companies and particularly re-insurance companies have
been experiencing their own little bull market within this
current bear market. Everest is a member of the latter group
that concentrates on offering re-insurance. Re-insurance is a
way for the larger insurance companies to pass off some of their
risk. Clearly, this has been a very good business for Everest.
The Company reported earnings at the end of October that showed a
nice increase of $0.12 over the same quarter a year ago. The
recently announced profits were $1.03 per share. Despite these
solid numbers, the stock is trading with a very reasonable P/E of
18.90. If the flight to "safety" continues, Everest could easily
enjoy an extended up trend. On Friday, Salomon Smith Barney
initiated coverage of the stock with an "Outperform" rating.
Since March, the 50-dma has provided support for the strong up
trend. Currently, the MACD is extremely strong, indicating that
the trend could continue. OBV and Money Flow are also stellar.
Right now, the RSI is indicating a short term overbought
condition. Short term support is offered by the 10-DMA at $57.88.
We are setting our initial stop at $57.00. Resistance comes in
at the all time high of $61.88, established on Friday. If RE
continues its ascent, please look to our In Play section for the
upward revision of our stop.
Picked on November 12th @ $61.25
Change since picked +0.00
SPLIT CANDIDATE PLAY UPDATES 11/12/00
BMET - Biomet $38.44 (+1.63)
There probably is not an orthopedic surgeon alive who has not
heard of Biomet. The Company is a worldwide leader in developing
and marketing a myriad of tools and equipment that have changed
orthopedic surgical procedures as well as rehabilitative
treatments. The Company even has a presence in dentistry because
they also make reconstructive dental implants. (NHL players are
probably very familiar with the Company as well). Through the
first 3 quarters this year, profits grew by 18%. When Biomet
reports earnings on December 13th, it should cap off a very good
year. Analysts expect profits of $0.29 a share. At first glance,
it may appear that Biomet's stock price is currently too low to
entice management to announce a split. History tells us
otherwise. A 3:2 split was paid on August 8th. At the time the
split was announced the stock was trading at $38.00. Shares of
Biomet have been in a straight up trend since mid-October. There
has been a mild pullback recently in the stock, which is actually
impressive, given that that the NASDAQ is getting creamed.
Another explanation for the pullback is the current overbought
condition, foretold by the RSI line. Although this condition has
been somewhat relieved, this indicator remains near the top of
its range. We have set our stop at $33.00, which is just below
the support level of $33.72 offered by the 50-DMA. If the stock
does make a new high this week, you can find our adjusted stop
level in our In Play section. Otherwise, we will exit this play
either right before the earnings or right after a split
Picked on October 31st @ $36.19
Change since picked +1.63
CEFT - Concord EFS $41.19 (-0.63)
ATM card authorization and processing service provider, Concord
EFS continues to consolidate. The stock spent most of Fridays
session in negative territory, trading as low as $41.06 on light
volume. CEFT is having trouble clearing the 5-dma. The violation
of the stocks 10-dma on declining volume gives us some reason
for concern. As far as a split announcement, CEFTs last 6 splits
were 3:2 splits when the stock was trading in the $30-$40 range.
All 6 splits were announced following a Board of Directors
meeting. Currently, the stock price is within historic split
range and CEFT has enough shares for a 3:2 split. Now all we need
is a BoD meeting (none currently on the horizon, but we monitor
these closely). Until then, support is the 20-dma at $40.19 with
additional support at the October 27th intraday low of $38.13.
CEFT has resistance at the 5-dma, currently at $43, and then $44,
just above the November 8th intra-day high. We are looking for
additional entry points on a bounce off of $40.19 or a move above
$43 on midday volume greater than 1 million shares. We are
keeping our stops at $37 as protection.
Picked on Oct 31st @ $41.31
Change since picked -0.12
MOMENTUM PLAY UPDATES 11/12/00
LU - Lucent Technologies Incorporated $21.88 (-2.44)
Lucent continues to develop leading edge Internet products and
services. One of the companys latest offerings, the virtual
telephone, allows travelers to carry a phone in their laptop. The
virtual telephone is designed to provide cost savings and the
benefit of anytime, anywhere voice and data transfers through the
Internet. Ending the week lower, shares of LU continued to lose
ground, as the NASDAQ Composite hit its lowest close for 2000.
However, in relation to other technology stocks, LUs recent
weakness has been relatively light. We feel that this is likely
the result of the stocks sharp decline earlier this year. Its
hard to imagine LU trading below the $20 mark. Nevertheless, to
protect against this possibility well keep a firm stop at
$20.50. Expect to see some degree of support to come before our
stop at the $21 mark, bolstered by previous lows. Light volume of
14 million shares traded on Friday, suggests to us that the
recent fall may be attracting fewer sellers at lower prices.
Keeping this in mind, well look for initial resistance to now
challenge LU at the 20-dma of $22.48. Higher up, the recent
consolidation near $24.50 will pose further opposition ahead of
the intermediate high of $25.69. Well look to open new positions
with advances through resistance or sharp reversals from support,
when good daily volume of 20 million shares can accompany the
run. Consider confirming entries with strength or weakness in the
NASDAQ Composite Index.
Picked on November 2nd @ $24.19
Change since picked -2.31
MO - Phillip Morris Cos. $36.88 (+1.88)
Philip Morris is the world's largest producer and marketer of
consumer packaged goods. Shares of MO moved higher on Friday
after the company declared its quarterly dividend of $0.53 per
share. The stock broke through the 10-dma, hitting an intra-day
high of $37.13 on average volume. The Presidential election
continues to be the main driver of the tobacco sector so MO may
be stuck in a trading range next week. For now, support is the
20-dma at $35.06 with stronger support at the November 6th intra-
day low of $33.50. There is resistance at Wednesdays intra-day
high of $37.25 and then $38, just above the October 31st intra-
day high. Due to the delay in the election results and the
potential for range-bound trading in MO, we will open new
positions on a convincing move above $38 or a strong bounce off
of the 20-dma on midday volume greater than 4 million shares. We
are leaving our stops at $33 to minimize risk.
Picked on October 26th @ $36.00
Change since picked +0.88
SBC - SBC Communications Inc. $57.13 (-0.06)
SBC Communications finished the week pretty much where it
started. The political turmoil has left a chill in the air amidst
investors, and SBC was not spared from the cool draft. The
Telecommunications provider reached a high for the week of $58.50
before easing back to Friday's close. There has not been any
direct news events affecting the stock, save the election
debacle. Next week should prove to be as volatile as this week
until some resolution is made regarding the nations highest
public position. As of this week's closing price, we now see
support for SBC at the 10-dma at $57.00 and then down at the 20-
dma at $55.15. Resistance remains the same for now, first at
$58.00 and then at $59.00. The trading volume has become lighter
(by about 900K shares) and we'd like to see volume on the up side
of over 6.5 million if the stock is to conquer resistance. A
possible entry point for this play might be on a bounce off
support accompanied by good volume. We will keep our stop loss
set at $52.00. Please take a moment each day to review our stops
in our IN PLAY section as they are adjusted when our picks move
Picked on October 29th @ $56.31
Change since picked +0.82
SPLIT CANDIDATE PLAY DROPS 11/12/00
MOMENTUM PLAY DROPS 11/12/00
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