As discussed yesterday, this is another week with trades running at a higher risk than normal. Last week’s trade of the week in Minefinders Corp (MFN) did great if you took profits or used stop losses to protect profits before the end of the week market crash.We’ll see if we can do it again this week, but I will be keeping positions smaller due to the additional risk. Be sure you take profits when you have them. This market is has a short-memory and profits can quickly be taken from you.
SPNC as described on Yahoo Finance:
The Spectranetics Corporation designs, manufactures, and markets single use medical devices used in minimally invasive surgical procedures within the cardiovascular system in conjunction with its proprietary excimer laser system, the CVX-300. The companys excimer laser technology is used to ablate multiple lesion morphology morphologies, such as plaque, moderate calcium, and thrombus. It offers four primary product categories for the Vascular Intervention product line, including peripheral atherectomy, coronary atherectomy, thrombus management, and crossing solutions. The peripheral atherectomy product line consists of a selection of proprietary laser catheters that are indicated for the treatment of infrainguinal (leg) stenoses and occlusions; and the coronary atherectomy product line includes a selection of proprietary laser catheters to be used in various types of coronary artery diseases comprising occluded saphenous vein bypass grafts, ostial lesions, long lesions, moderately calcified stenoses, total occlusions traversable by guidewire, lesions, and restenosis. The thrombus management product line consists of three thrombus removal devices intended to remove fresh, soft thrombi, and emboli from vessels in the arterial system, as well as to address thrombotic occlusions in dialysis grafts and fistulae; and the crossing solutions product line support guidewires or other devices in facilitating vascular access in the arterial system to enable various types of interventions. The companys lead management product line comprises excimer laser sheaths, non-laser sheaths, and cardiac lead management accessories for the removal of pacemaker and defibrillator cardiac leads. It sells its products in the United States, Canada, Europe, the Middle East, the Asia Pacific, Latin America, and Puerto Rico. The company has a strategic alliance with Kensey Nash Corporation. The Spectranetics Corporation was founded in 1984 and is based in Colorado Springs, Colorado.
Fundamentally, according to Yahoo Finance, SPNC has about $36 million in cash with no debt. They are not currently turning a yearly profit, but analysts predict they will by the end of this year. Average analyst’s price target is about $9.
Technically, SPNC has quietly been working towards 52-week highs despire the overall market uncertainty. SPNC is just below 52-week highs of $7.21, which has already been tested twice in July. With accumulation growing this time around, I expect another 52-week high test should prove enough to break to new highs. The trade is to buy on a pullback towards the bottom of the current trading range near $6.60 or buy on a solid volume move above today’s high of $7.06 with a stop just under $6.50 or the 50-day SMA. See the chart for more details.
- Dunkin’ Brands Group (DNKN)
DNKN as described on Yahoo Finance:
Dunkin Brands Group, Inc., together with its subsidiaries, owns, operates, and franchises quick service restaurants worldwide. It franchises restaurants under Dunkin Donuts and Baskin-Robbins brands. As of March 26, 2011, the company had 9,805 Dunkin Donuts points of distribution, including 6,799 were in the United States and 3,006 were international; and 6,482 Baskin-Robbins points of distribution comprising 2,523 were in the United States and 3,959 were international. It also leases restaurant properties. Dunkin Brands Group is headquartered in Canton, Massachusetts.
DNKN is also a recent IPO that has received a fair amount of media attention for it this summer.
Fundamentally, according to Yahoo Finance, DNKN has about $150 million in cash and $1.87 billion in debt, a concern to most. Forward P/E is about 25, which is a bit higher than most would like. Still, average analyst ratings are between $29 and $33.
Technically, DNKN is ignoring the fundamentals and looking ready to test August highs of $31.94. It has put together a strong string of green days even in this uncertain market on slowly increasing volume. The trade is to buy on a pullback towards $27 with a stop just under $25.95 or buy on a strong volume move above $29.88 with the anticipation this move will attract more buyers and we will break to new highs. If buying on the momentum above $29.88, I’ll keep an initial stop somewhere under $29.88 to protect the recent buy as that is a far move to the bottom of the trading range if it starts to break down. I prefer buys near support levels to keep risk minimal while giving way to strong upside potential. See chart for more details.
Again, consider keeping positions smaller than normal as we have a lot of headline risk in this market. The overall market can sell-off in the blink of an eye, so I’ll let my stop losses trigger if that is the case and move to the sidelines until the situation calms down.
As always, do your own homework to see if you agree. Good luck out there.
Mike
No positions in mentioned stock, but may initiate within 72 hours.
(SPNC: 7.05 0.00 0.00%, vol: 0, avg vol: 170,966, 50-day: 6.23, 200-day: 5.83, yield: N/A, cap: 236.8M, short ratio 9.40, 52wk: 4.12 – 7.21, 1yr target: 9.33)
(DNKN: 29.18 0.00 0.00%, vol: 0, avg vol: 2,205,460, 50-day: 26.63, 200-day: 26.88, yield: N/A, cap: 3.508B, short ratio 2.20, 52wk: 24.97 – 31.94, 1yr target: 29.42)
(MFN: 14.93 0.00 0.00%, vol: 0, avg vol: 729,094, 50-day: 16.51, 200-day: 14.32, yield: N/A, cap: 1.212B, short ratio 3.90, 52wk: 8.47 – 17.95, 1yr target: 19.32)
