Nasdaq 100 Watch List: November 2, 2012

Below are the Nasdaq 100 companies that are within 10% of their respective 52-week lows. Stocks that appear on our watch lists are not recommendations to buy. Instead, they are the starting point for doing your research and determining the best company to buy. Ideally, a stock that is purchased from this list is done after a considerable decline in the price and rigorous due diligence.

Symbol Name Price P/E EPS Yield P/B % from low
WCRX Warner Chilcott plc 11.47 10.07 1.14 0 13.28 0.35%
DELL Dell Inc. 9.15 5.45 1.68 3.5 1.66 0.44%
BBBY Bed Bath & Beyond Inc. 57.1 13.27 4.3 - 3.31 0.67%
FFIV F5 Networks, Inc. 82.59 23.94 3.45 - 5.1 1.87%
ALTR Altera Corp. 30.51 17.05 1.79 1.3 3.1 3.11%
APOL Apollo Group Inc. 19.78 5.69 3.48 - 2.43 3.13%
NTAP NetApp, Inc. 27.74 19.58 1.42 - 2.33 3.39%
INTC Intel Corporation 22.06 9.62 2.29 4.1 2.26 3.96%
ATVI Activision Blizzard, Inc. 11.16 15.9 0.7 1.6 1.18 4.00%
VOD Vodafone Group Public Limited Company 26.91 12.29 2.19 7.4 1.1 4.99%
FLEX Flextronics International Ltd. 5.74 7.81 0.74 - 1.61 5.32%
BIDU Baidu, Inc. 105.09 23.78 4.42 - 10.09 5.40%
MCHP Microchip Technology Inc. 32.14 20.75 1.55 4.4 3.12 6.32%
NVDA NVIDIA Corporation 12.49 16.46 0.76 - 1.75 7.39%
EXPD Expeditors International of Washington Inc. 36.91 21.97 1.68 1.5 3.83 7.92%
AMAT Applied Materials Inc. 10.81 12.98 0.83 3.3 1.62 8.43%
SPLS Staples, Inc. 11.47 8.64 1.33 3.8 1.18 8.51%
GRMN Garmin Ltd. 37.5 12.67 2.96 4.8 2.19 8.98%
MRVL Marvell Technology Group Ltd. 7.98 10.22 0.78 3 0.94 9.02%
DLTR Dollar Tree, Inc. 39.59 17.63 2.24 - 6.11 9.85%
MNST Monster Beverage Corporation 44.03 24.6 1.79 - 6.68 9.91%

Watch List Summary

The top stock on our list is Warner Chilcott (WCRX).  On April 30, 2012, we recommended that investors sell WCRX after a +50% increase in the stock price from our December 16, 2011 watch list.  Since our recommendation to sell WCRX, the stock has declined -47.41%.

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We believe that WCRX will declined to the $10 level before it is worth reconsidering the value attributes of this company.

On January 12, 2012, we assessed the points at which an investor could take advantage of the decline of NetApp (NTAP).  At the time, NTAP was trading at $36.85 and we suggested that the stock would be a good buy at $30 and $23.47.  Afterwards, NTAP increased +34.5% to the March high and the fell below the Jan. 12th price.  After falling slightly below the $30 level, NTAP rose +20% to the September high.  Anyone who has not participated in the $30 purchase price can do so at the current price and potentially at the $23.47 level.

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Nasdaq 100 and Apple Inc.

The most important aspect of the movement of the Nasdaq 100 (NDX) is the impact that Apple Inc. (AAPL) has on the index.  Below you can see a comparison between the index and the stock.

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The high level of correlation that exists between the Nasdaq 100 and Apple, since mid-2011, suggests that the tail is wagging the dog and should result in the index declining further if any negative news comes from Apple.  Strictly from a technical standpoint, it would not be unusual for AAPL to retest the May 2012 lows before recovering in price.  In addition, we believe that Apple Inc. could retest the conservative downside target of $312.87 based on the revised Speed Resistance Line below:

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In order to understand where the Nasdaq 100 might go, consideration of Apple Inc. (AAPL) is required.

Watch List Performance Review

In our ongoing review of the Nasdaq 100 Watch List, we have taken the stocks from our list of November 4, 2011 (found here) and have checked their performance one year later. The top five companies on that list are provided in the chart below from November 4, 2011 to November 2, 2012.

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3 responses to “Nasdaq 100 Watch List: November 2, 2012

  1. sandesh desai

    What is your opinion on dell? 3.5 % yield.

    • Greetings Sandesh,

      From what I can see, Dell is within 13% of the 2009 low. This suggests that the stock is under considerable strain even though we’re not in “crisis mode” as was the case when Dell bottomed in 2009. I expect that Dell will retest that low ($8), at minimum. The $4.15 level is the next technical support.

      However, if you’re interested in purchasing Dell, I would consider making the purchase in three stages with $8 and below as the starting point, with the understanding that it is a pure speculation. Dell appears much more speculative than I’d like and believe that there are reasonable alternatives that could take its place.

      Contrast this with our most recent purchase of Intel (INTC). Essentially, we have taken the view that the PC is not dead and that there are values to be found. From a technical standpoint, INTC has maintained a solid uptrend from the 2009 low and has a better fundamentals, including dividend yield.

      Whether HPQ or DELL come out ahead is of less concern since we believe the INTC will be the primary supplier of chips when the cycle turns.

      Thanks for the question and I hope all is well with you and your family.

      Regards.

  2. sandesh desai

    Thanks for the reply.
    Sandesh