Category Archives: Warren Buffett Stocks

Logitech International is Now Over the Hump (LOGI)

To say the past twelve months have been tough ones for Logitech International SA (NASDAQ:LOGI) might be an understatement. Shares have fallen from a high of $10.29 last September to a low of $6.24 in April of this year. Though LOGI hasn’t traded lower than that since then, it’s not like the stock’s suggested it wants to stage a major recovery… unless maybe you look really, really close. Well, I did.

If the name rings a bell, it may be because you’ve got some Logitech International SA equipment attached to the device you’re using right now. The company makes computer peripherals – speakers, keyboards, cameras, etc. Their stuff is among the best in the industry. That’s not why I’m rapidly becoming a fan of LOGI, however. In fact, the organization has failed to turn a profit over the past four quarters (on a net basis). I’m rapidly becoming a fan because the chart says the worst of the company’s sales and earnings struggles are behind it.

How’s that? In simplest terms, LOGI has now made a higher high following a higher low. It’s the first time it’s happened in over a year.

Don’t discount the importance of that detail, and its technical ramifications. Logitech International SA has been working on this rebound for months, slowly logging an arc-shaped reversal (the kind that sticks) since late March. As of this week, however, that turnaround effort finally finds the undertow working in its favor.

Analysts foresee numbers that jive with the stock’s recovery. After Logitech International lost a total of $175 million over the past twelve months on $2.11 billion in sales, these pros are looking for a per-share loss of $1.11 for that timeframe to turn into a $0.27 profit per share this fiscal year. Sales are still expected to roll in at only $2.03 billion this year, but are projected to improve to $2.08 billion in fiscal 2014, when the company should earn $0.43 per share. That’s officially a turnaround.

It’s not just a pipedream either. Last quarter, LOGI beat estimates for the top line as well as the bottom line. Better still, the company is now on a mission to divest all divisions and product lines that aren’t profitable by the end of 2014. That’s music to investors’ ears, played by Logitech speakers.

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The Venaxis Spring is Coiled (APPY)

I know on the surface that Venaxis Inc. (NASDAQ:APPY) hasn’t exactly been the most riveting of stocks lately. Heck, APPY shares are exactly where they were at the end of July, and volume has been even less than minimal. I’m telling you though, there’s just something about this stock – and its chart – that tells me an explosive bullish move is brewing.

Just as a preface to a chat about APPY, think about a spring that’s coiled. There’s potential for a violent “boing”, but as long as whatever’s keeping the spring is coiled, then that potential de-coiling is irrelevant. If for some reason the spring’s shackles are undone, the look out – BOING! Yeah, well, just think of Venaxis Inc. as a coiled spring. It’s not doing anything right now, but it could very easily make an explosive bullish move with just one small (and easy to achieve) catalyst.

The Venaxis spring has been coiled by a rising support line and a falling support line. The rising support line is the 50-day moving average line (purple), while the falling support line is the 100-day moving average line (gray). Those two moving averages are on a collision course though, and clearly APPY can’t drift sideways between the two when there’s no space to waffle in between then.

But how do we know APPY is apt to make a bullish break rather than a bearish one? Truth be told, we don’t; there are never any guarantees in trading. But, there are some clues in place that suggest the undertow is bullish.The biggest clue in favor of bullishness from Venaxis Inc. is the fact that the stock’s actual still in a broad (even of wobbly) uptrend since June’s lows. The way shares have been gyrating around the $1.46 mark is also a biggie. That line was resistance in June and July, and though it’s not exactly become a support line yet, clearly the buyers are having no problem holding the stock above that former technical ceiling.

As for the timing, we’re apt to see the spring uncoil sooner than later. Though just gyrating around the $1.46 mark, we can also see the string of higher lows and lower highs has pretty much taken APPY to the pointy tip of a wedge shape [aided by the two key moving average lines]. The contraction is squeezing the chart tighter and tighter, but there’s no room left… the pressure building.

The proverbial green light is a close above the 100-day moving average line, currently at $1.48. Not only will a move above the 100-day line crack what’s been a tough ceiling, it will also rock Venaxis Inc. shares out of the converging wedge pattern.

The trick is exercising patience until that one last step is taken.

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Oppenheimer Reiterates “Buy”, Raises PT On Eaton Corp (ETN)

Oppenheimer reported on Tuesday that it is maintaining an “Outperform” rating on the Ohio-based power management company Eaton Corp (ETN), but went on to raise its price target for the stock.

After meeting with Eaton’s management team, analyst Christopher Glynn reported some encouraging prospects for the company. Glynn noted that, “Near-term capital allocation priorities remain reducing debt incurred from the Cooper deal, with no significant acquisitions expected until integration is complete (~2 years remaining). ETN has deployed 50 full time acquisition integration team members to accelerate CBE progress, and thus lacks the resources to adequately pursue additional large deals.” Given the improving outlook, Oppenheimer raised its price target on the company from $73 to $78.

Eaton Corp shares traded higher on Tuesday, gaining 1.35% on the day. The stock is up 30% YTD.