Virgin Media (VMED)
On February 17 VMED posted its strongest ever full-year financial results, revenue growth across all areas were up 5.8% Y v Y, and up 6.6% on a quarterly basis. Neil Berkett, Chief Executive Officer of Virgin Media, said: “A strong financial performance combined with the launch of a number of market leading product developments ensured 2010 was a year of great achievement for Virgin Media. We have driven our consumer division to its highest ever rate of revenue growth, maintained robust cost control and delivered our best ever financial year. The significant strides forward in our Mobile and Business operations contributed to this substantial result.”
After the earnings announcement, VMED traded on what appears like an ascending triangle with a flat upper line around 28. For more than 2 months buyers could not make up their mind about the stock price going above 28, then on April 20 VMED reported solid financial results again. Quarterly total revenue of approximately $1,600 million was up 5.7% year over year, quarterly free cash flow was around $162.8 million, up 117.7% year over year, and net income from continuing operations was approximately $7.3 million or 2 cents per share compared with a net loss of $266.2 million or a loss of 82 cents per share in the prior-year quarter.
VMED broke above the flat line at 28 and closed Thursday at 29.76 for a 6.3% increase above resistance.
The stock looks overbought with a strong possibility of a pause or a return move back to the support line which should take place on light volume. The big picture for VMED shows the stock trading at a 3 year high with no foreseeable resistance.
Measuring techniques give us a target of 32, for an 8% profit, a move below 27 will be a signal of exiting the trade for a 9.27% loss.
Crosstex Energy LP (XTEX)
Crosstex operates as an independent midstream natural gas company. The midstream natural gas industry is the link between exploration and production of natural gas and the delivery of its components to end-use markets. In North America, the industry includes approximately 1.2 million miles of pipeline, 525 processing plants and other facilities.
The Company was formed in 1996 to provide gas gathering, processing, transmission, distribution, supply and marketing, as well as crude oil marketing.
Crosstex has 500+ employees, with headquarters in Dallas, Texas.
Crosstex offers two equity securities for investment. Crosstex Energy, L.P. (NASDAQ: XTEX) is a master limited partnership (MLP) that owns and operates the assets of the midstream energy business. The partnership's equity is traded in common units. Crosstex Energy, Inc. (NASDAQ: XTXI), a corporation, is a holding company and the general partner of Crosstex Energy, L.P. Its equity is traded in common shares.
Let’s take a look at the following chart showing XTEX quarterly distributions and stock prices:
From November 2004 to November 2007, XTEX price was between 21 and 27 and the stock was yielding over 7% in yearly distributions. On 8/15/2008 the stock closed at 22.91 yielding at the time over 10% in distributions. Then on 11/14/2008 the stock closed at 5.24 with a yearly dividend yield over 45%, of course that was a warning of bad things to come and on 3/2/2009 on its 10K for the period ending 2008-12-31 the company announced that they will not be able to make distributions to unit holders in future periods until their leverage ratio does not improve and the PIK notes are not first repaid.
More than a year passed without distributions to unit holders from the payment on 02/15/09 to the next payment on 11/12/2010. Right now at 17.94 the stock is yielding 4.46%. The last quarterly distribution on the Partnership’s common and preferred units will be $0.29 per unit payable May 13 to unitholders of record May 2. If we assume at least an equal distribution for the following quarter, at current price the yield would be 6%, a little bit below the 2004-2007 yields above 7%.
Anyway, a stock breaking above its 8 week channel is worth some following. If entering the trade, the 16 level should act as support.
EMC Corporation (EMC)
On April 20 this IT company maker of storage computers, reported a 28 percent gain in first- quarter profit as companies increased spending on data centers capable of delivering tasks through the Internet.
Net income rose to $477.1 million, or 21 cents a share, from $372.7 million, or 17 cents, a year earlier, EMC said today in a statement. Sales rose 18 percent to $4.61 billion last quarter, exceeding the $4.5 billion average estimate. EMC reiterated its full-year profit forecast of $1.46 a share, excluding some items.
For nearly three months EMC traded in a range between 25.50 and 27.50, breaking above resistance on April 20 along with the strong quarterly results. The crossover of the ma(10) above the ma(30) accompanied with above average volume give us some hope of price increasing in the following weeks. The price should hold above 27.50 but a penetration below is a warning sign. A move below 25.50 definitely is a get out signal.
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- Erick Stern
- I am a civil engineer who likes charts, to me, speculating in the markets is both a hobby and a second profession and in my view the stock market is the most honest environment, since it is only your knowledge and preparation that matters. I live, and work in the construction industry, in the Dominican Republic. I read and answer all my mail so please feel free to write firstname.lastname@example.org Thanks, Erick