Nasdaq 100: March 8, 2013

Below are the Nasdaq 100 companies that are within 11% 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 yr low
AAPL Apple Inc. 431.72 9.79 44.11 2.5 3.17 3.04%
BIDU Baidu, Inc. 89.22 18.76 4.76 - 7.61 3.79%
WFM Whole Foods Market, Inc. 85 32.06 2.65 0.9 4.5 5.19%
GRMN Garmin Ltd. 35.61 12.9 2.76 5.1 1.94 5.79%
MSFT Microsoft Corporation 28 15.38 1.82 3.3 3.25 6.63%
NUAN Nuance Communications, Inc. 19.22 34.82 0.55 - 2.16 6.78%
ROST Ross Stores Inc. 56.2 16.96 3.31 1.2 7.23 8.06%
LMCA Liberty Media Corporation 110.24 9.36 11.78 - 2.06 9.15%
BBBY Bed Bath & Beyond Inc. 59.37 13.56 4.38 - 3.28 9.28%
TEVA Teva Pharmaceutical 40.16 17.85 2.25 2.8 1.49 9.64%
ISRG Intuitive Surgical, Inc. 514.63 32.2 15.98 - 5.76 10.14%
NDX Nasdaq 100 2804.11 - - - - 14.73%

Watch List Summary

Apple Inc. (AAPL) is at the top of our watch list as it is within 5% of the one year low.  In our April 14, 2012 test of the quality of Edson Gould’s Speed Resistance lines, Apple fell from $636 to our projected level of $424.15 (found here).  Now that the stock has achieved our downside target, we expected that a reaction to the upside is likely.

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We’d be satisfied if Apple were able to rise to the first upside target at $514.37, a gain of +19.27%.  We suggest that anyone who is seriously considering this stock should have only the first upside target as their goal.  When and if the stock goes above $514.37, the stock should be sold if it re-tests the same level on a downside move.  The same approach should be used if the stock rises above $609.72 (…but does not fall below $514.37 after the initial purchase).

Another stock of interest is Ross Stores (ROST).  This discount retailer falls in line with our recent purchase of Dollar Tree (DLTR) and Family Dollar Stores (FDO).  Therefore, we currently have a bias for this company.  However, when looking at the price action of the stock, there is a lot more to this stock other than being close to the 52-week low.  According to Dow Theory, the price activity judged over a long period of time reflects all good and bad news (i.e. fundamentals) along with future expectations of the company by the most competent investors and managers in the company.  Below is the Speed Resistance Lines for Ross Stores.

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Based on the most recent low in the price of ROST, we can expect that if the stock goes below $52.01 then the downside target is going to be to the conservative downside target of $37.35.  Alternatively, if ROST rises above $61.50, the stock is likely to rise to the previous high of $70.  We’d take a wait and see attitude on this value prospect.  We’d buy ROST in two stages, once at $52.50 and again at $40 using 7% of the portfolio for each purchase.

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