Stocks in the News: Priceline, Mosiac, Teva

Crista Huff
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Posted: May 14, 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: 

Priceline.com, (SYMBOL: PCLN) and the headline says:

Priceline Profit Tops Analysts’ Estimates —(Bloomberg)

Priceline.com reported earnings of $5.76 per share, embarrassing Wall Street’s $5.27 estimate, on a continued surge in international hotel bookings.

Earnings growth projections have risen since we last reported on Priceline.  Estimates have gone from 20% growth to 23% growth in 2013.  Now that Priceline has exceeded expectations again, expect those numbers to ratchet higher.  The PE is 19.8.

The stock price is getting ready to break through all-time highs and climb upwards.  On Feb. 27, we told investors to buy Priceline.com during a market correction.  With consistent upside earnings surprises, ….

Our Ransom Note trendline says:  BUY PRICELINE.COM.

PCLN Chart

PCLN data by YCharts

Stock number two is: 

Teva Pharmaceutical Industries Ltd., (SYMBOL:TEVA) and the headline says:

Israel scrutinizing Teva’s low tax rate – Morgan Stanley Research

“The Globes reports that Israel’s Minister of Finance … told Teva CEO Jeremy Levin that ‘the time has come to change the rules of the game on trapped profits and tax benefits’ in a meeting on Friday, May 10,” reports Morgan Stanley.

Teva, the world’s largest generic drug manufacturer, is based in Israel, and paid a 12% income tax rate last year.  While the company is solidly profitable, earnings per share have been declining in recent years, with another 6% drop expected this year.

The stock has been suffering and trading sideways for quite a few years.

Our Ransom Note trendline says: AVOID TEVA PHARMACEUTICALS.

TEVA Chart

TEVA data by YCharts

Stock number three is:

Mosaic Company, (SYMBOL: MOS) and the headline says:

Mosaic Company Could Be A Potential Takeover Target -- iStockAnalyst.com

Mosaic Corp., the world’s largest producer of phosphate crop nutrients, is expected to repurchase $2.6 billion in stock this year from Cargill shareholders and trust.  Mosaic has $2.4 billion in surplus cash and another $3B in incremental available liquidity.  The company is also seen as a potential takeover target, with speculation that BHP Billiton would pursue the acquisition.

Mosaic has a history of earnings bouncing around, which are expected to be down 7% this year, then up 20% next year.

The stock is volatile, but the chart pattern is very bullish, and appears immediately ready to break out and rise toward $72.  Experienced investors and traders should take a closer look.

Our Ransom Note trendline says:  MOSAIC COMPANY IS A TRADING BUY.

\MOS Chart

MOS data by YCharts