Stocks in the News: Sotheby's, Celgene, Nvidia

Posted: May 11, 2013 12:01 AM

Welcome to John Ransom's Stocks In The News, where the headline meets the trendline.

Stocks in the News is produced by Ransom Notes Radio and Goodfellow, LLC. Crista Huff manages Goodfellow LLC, a website that recommends outperforming stocks using fundamental and technical analysis.   

Stock number one is: 

Sotheby's, (SYMBOL: BID) and the headline says:

Sailing Towards a Flotilla of Better Margins & Growth – Citi Research

Sotheby’s, auctioneer of fine art, jewelry and collectibles, reported an earnings miss, primarily due to lower commission margins.  The company implemented a new pricing structure in March to solve that problem.  Citi commented, “While first quarter was below expectations, we like the revenue growth trends apparent in the business.

Wall Street previously expected earnings to grow 36% this year, but Citi Research now expects 11% growth.  Watch for full-year consensus estimates to be revised downward.

The stock has been trading mostly between $28 and $40 for three years.  Watch for it to trade between $34 and $40 in the near-term.

Our Ransom Note trendline says:  STAY ON THE SIDELINES.

BID Chart

BID data by YCharts

Stock number two is: 

Celgene Corp., (SYMBOL: CELG) and the headline says:

Solid Growth Prospects Lie Ahead With Multiple Upside Scenarios – Citi Research

Biopharmaceutical company Celgene Corp. hosted an Analyst Day this week, with the key takeaway being that Apremilast has much larger growth prospects than are currently factored into consensus estimates.  Apremilast is in multiple Phase III trials, targeted to treat psoriasis, psoriatic arthritis, and other chronic inflammatory diseases.  Citi Research maintains a bullish long-term outlook.

Earnings per share are projected to grow 17%, 20% and 28% in the next three years.  The PE is 21.7, in a four-year range of 17 to 35.

We recommended that investors buy Celgene on March 5, when the stock was in a breakout pattern.  It rose $17 dollars, and is now trading between $116 and $128.

Our Ransom Note trendline says.....  BUY CELGENE CORP.

Stock number three is:

CELG Chart

CELG data by YCharts

Nvidia Corp., (SYMBOL: NVDA) and the headline says:

Nvidia smashes first quarter estimates but outlook is wobbly --- Zdnet

Nvidia Corp., maker of computer graphic chips, reported first-quarter sales and earnings above consensus estimates.  However, full-year estimates are being revised downwards due to a competitive pricing environment and heavy investment in new Tegra products.

"Earnings per share are projected to fall 22% this year."

The stock has been trading sideways between $11 and $17 for two years.  Shareholders should take advantage of price fluctuations to jump out of Nvidia and into a stock with consistent earnings growth.

Our Ransom Note trendline says....  STAY ON THE SIDELINES.

NVDA Chart

NVDA data by YCharts