Background

VeriFone (PAY) is a global leader in secure electronic payment systems. The company provides products, services and solutions for cashless payments. The product range is aimed at network operators, banks, retailers, hotels and restaurants, gas stations, and government agencies and the healthcare industry. The stock is listed on the NYSE.

Over the last 5 years the stock made a downtrend. Since the beginning of June this year the stock made also a new downtrend on the daily chart, which already made a correction. This results in an opportunity for a short trade.

 

figure 1

figure 1

 

Management and risk description

 

The stock of PAY made 75% correction of the last movement since the end of September. At the moment, the stock moves in a sideways phase (Fig.2 – green, red line) and we could start our short trade, if the stock will leave this sideways phase. A trader could be looking at a subordinate trend to get an entry. Figure 2 shows a resistance zone which is located (drawn in red bar) that additionally underpins the preferred short scenario.

 

figure 2

figure 2

 

This resistance zone consists of the SMA200 line (red line) and the EMA130 (blue line). Before this zone is not significantly broken the downtrend is intact. If the price significantly overcome the price level of about $32, our short-idea would be over.

Parameters

Entry: $30,00

Stop: $32,00

Target: $26,00, $23,50

Time horizon: medium-term

 

Disclaimer:
Disclosure according to § 34b WpHG due to potential conflicts of interest:
The author is not invested in the relevant securities or underlying securities at the time of publication of this analysis

 

Background

Manpower belongs to the top three employment agencies with approximately 35,000 employees, 3,100 branches worldwide and revenues of $20.3 billion in 2014.

In Figure 1 we can see that the stock price has risen since 2011 from about $32.00 up to about $97.50. Currently the stock is in a correction after it reached it´s all-time high. For the medium-term trader a local downtrend on the daily chart has formed and is currently in a correction.

 

MAN_1

 

Management and risk description

On the daily chart we can see this downtrend, which is drawn in blue. The down movements have much more volume which is a good indication for a short trade. Currently the stock made a 90% correction and we could get an entry very soon.

For a medium-term short trade we could wait for a subordinate downtrend to get an entry into this trade. With increasing selling pressure this trade our targets are $77.50 and $63.00.

Above the price level of $91.00 our short idea would be over and we would have to wait until the stock made a new trend.

 

MAN_2

 

Parameters

Entry: $83.00

Stop: $87.50

Target: $77.50, $63.00

Time horizon: medium-term

Background und Analysis

Williams Companies Inc. (WMB) is an US-based energy company. It´s core business is transportation and processing of natural gas. The stock of WMB is a component of the S&P500 and the Dow Jones Utility Average.

WMB is in an uptrend (figure 1, green trendline1, SMA200 and EMA 130) which has risen from $17.53 in 2010 to $61.38 in June, 2015. Since the end of June WMB is in a strong correction, which formed an downtrend (figure 1, green trendline2, red arrows). This might give us the chance for a short-trade.

 

figure 1

figure 1

 

 Trading

WMB formed a correction of 70% since end of september (figure 2). This gives us lucrative targets around $35 and $31 (figure 2, green targets) in short direction. You might look for a short entry in a subordinate trend. In figure 2 you can see a resistance zone (red rectangle), which also confirms our short-idea.

 

figure 2

figure 2

 

This resistance zone consists of the SMA200 and the EMA130 which form a big resistance together with the red trend line.  The short trend is not broken as long as the stock price does not break through this zone. If WMB breaks $47.08 significantly our short idea is over. Before any trade it is always necessary to look for news e.g. company earnings.

 

Parameters:

Entry: around 40$ to 44$.

Stop: around 45$ to 47$.

Targets: 35$; 31$.

Time horizon: medium-term

 

 

Background und Analysis

Amgen is an US-American biopharmaceutical company headquartered in California. Amgen has 18000 employees and is the world’s largest independent biotechnology firm. The stock is listed on the NASDAQ.

In Figure 1 we can see that the stock has risen from $50.00 in 2011 to around $180.00. Amgen established a clear uptrend, which gained strength in the end of 2014. In 2015 AMGN developed a sideways range between $150.00 and $170.00 which is highlighted as a black rectangle in Figure 1. AMGN left this zone and formed a correction after breaking the SMA 100 and the trend line 1 downwards. If the stock also breaks through the $140.00 it should fall even faster. For mid-term traders there is a local downtrend on the daily chart at the moment which might correct until $155.00.

 

AMGN_1

 

Trading

On the daily chart (Figure 2) the strong downward trend is clearly visible (blue lines), which has left the sideways range (black rectangle). The strength is recognizable by the fast downward-moves since the all-time high, while the corrections take several days. The volume in the actual correction is unsteady.

At the moment the stock has formed a 90% correction with low volume at the moment and is near the SMA 100 and the SMA 200 which should form a strong resistance zone. For a defensive, mid-term short trade we could wait for a subordinate trend for an entry. A more aggressive option would be to trade the blue daily trend.

If the down-trend accelerates, there are lucrative targets at $132.50, $127.50 and $115.00. If AMGN breaks through $158.00 our short-trading idea is over. Before any trade it is always necessary to look for news e.g. company earnings.

 

AMGN_2

 

Parameters

Entry: $155.00

Stop: $158.50

Targets: $132.50 , $127.50 and $115.00

Time horizon: medium-term

 

 

 

Background

Daimler AG (DAI) is a leading international car producer which builds passenger cars, commercial vehicles and offers financial services. The company offers its vehicles and services in nearly all countries around the globe.

The stock made an uptrend over the last 5 year, but made currently a strong correction which is a downtrend on the daily chart. This results in an opportunity for a short trade.

 

figure 1

figure 1

Management and risk description

We can see our downtrend very clear on the daily chart and mid-term traders will now get the chance to find an entry. This downtrend already made a correction of around 75% which results in interesting targets around 63 € and 57 €.

 

figure 2

figure 2

We can also see an resistance zone which consists of the SMA 200 (red line) and the EMA 100 (blue line). Before this zone is not significantly broken the downtrend is intact. Should the stock, however, significantly break through the price level of around € 76.70, our Short-idea would be over. The decreasing volume in the correction (see Fig.2, black arrow in volume) is another indication that additionally favor a short position.

Parameters

Entry: 71,00 €

Stop: 74,00 €

Target: 63,00 €, 57,00 €

Time horizon: medium-term

 

 

Disclaimer:
Disclosure according to § 34b WpHG due to potential conflicts of interest:
The author is not invested in the relevant securities or underlying securities at the time of publication of this analysis

Background

Newell Rubbermaid is a company that operates in the consumer goods sector. The company works with Global Business Units, which develop world brands. Newell Rubbermaid has a wide range of products.
In Figure 1 we can see that the stock price has risen since 2011 from $12.00 to $44.00. The stock made a stable uptrend, but is currently in a correction. For mid-term traders this correction is a clear downtrend on the daily chart and this means we should get a good short opportunity right now. Especially while the overall market is still in a downtrend.
NWL_1
Management and risk description

On the daily chart (Figure 2) we can clearly see that a strong downward trend has formed, which is drawn in blue. This downtrend is supported by higher volume and currently the stock made a 80% correction with decreasing volume.
Mid-term traders could wait for a subordinate downtrend for the entry in the current correction. With increasing selling pressure the targets around $38.00, $36.50 and $34.50 could be very interesting.

Above $44,50 our short idea would be over.
NWL_2
Parameters

Entry: $43,50

Stop: $44,50

Target: $38,00, $36,50, $34,50

Time horizon: medium-term

Background and Analysis

Freescale Semiconductor, Ltd. is an American multinational Company which designs and produces Embedded-Processing solutions. In 2006 FSL agreed to a buyout by a consortium led by Blackstone Group. In 2011 FSL completed it´s IPO and is traded on the NYSE since then. In 2012 Freescale Semiconductor was bought by NXP Semiconductors (NXPI).

In the following technical analysis we will have a look on the downside-potential of FSL in a weak overall market. As you can see in figure 1, FSL is in a long-term uptrend since 2012, after the weakness in 2014, FSL made new highs in 2015 in a massive uptrend with only very small corrections. FSL developed a new all-time high on 06.01.2015 at $45.69.

Since the high in June Freescale temporarily lost around 30% of its value but in the last few weeks FSL bounced back from the low in August to $37.60 at the moment.

With the yearly high Freescale Semiconductor developed a clearly visible downtrend (figure1 red dotted line).

 

figure1

 

Trading

The actual down trend is in a correction which we want to use to enter a short trade. For entering a trade we could use a smaller down trend. The black arrows show one possible development of the stock price. Because of the high correction even our first target (figure2, target1) of $31.50 is quite lucrative, there you should consider a partial take profit. In front of our remaining position there are still interesting targets (figure2, target2) and in a weak total market even target3 might be possible with a small position still in the market after target 1 and 2.

If FSL breaks the blue line (figure2) clearly our short idea is over. If the stock price comes close to the blue line or breaks it only marginally and shows weakness we could still consider to enter a short trade with a really small stop loss.

 

figure2

 

Before any trade it is always necessary to look for news e.g. company earnings.

Parameters

Entry: $37.90-$39.50 or $40.90

Stop:  $41.00.

Targets: $31.50, $25.00 long-term $16.00.

Time-frame: medium-term

 

Disclaimer:
Disclosure according to § 34b WpHG due to potential conflicts of interest:
The author is not invested in the relevant securities or underlying securities at the time of publication of this analysis

 

 

 

Adidas AG

 

Adidas is a German sports equipment manufacturer and was founded in 1949. The company has it´s headquarter in Herzogenaurach and has currently about 53.700 employees.

Since 1995 Adidas is listed in the DAX on the Frankfurt Stock Exchange and currently the corporation has a market capitalization of 14,7 billion euros. With a weight of just 1,58% the company is one of the smaller companies that are listed in the DAX. Right now Adidas is behind Nike the world largest sportswear manufacturer.

In this fundamental analysis we will first look at the key financial ratios and will analyze how the company has developed over the last years. Then we will compare Adidas with Nike and we will also look at the different regions where Adidas is generating most of it´s revenue.

Finally we will summarize the main points of this analysis with the help of a SWOT-Analysis and we are also going to give a medium- and long-term outlook for the stock.

 

 

 

Key Financial Ratios

 

Over the last 8 years Adidas improved it´s revenue from 10.3 billion euro up to 14.5 billion euro, which represents a growth of 40%. But over the last 3 years the sales clearly stagnated and the company generated last year 2% less revenue than in 2012.

 

Adidas_figure1_englisch

 

 

In the picture above we can see that the revenue of Adidas not only stagnated over the last 3 years but also during the years 2007-2009.

 

 

Adidas_figure2_englisch

 

 

The net profit is stagnating over the last 8 years and only in 2013, Adidas was able to convince with a significant higher profit of almost 800 million euro. During the presentation of the latest earnings, the CEO of Adidas, Herbert Hainer, said that revenues are stagnating due to currency fluctuation in key international markets such as Russia and Argentina. At the same time the Golf division and the US sales are showing some weakness. In 2014 the sales in the US decreased by 7%.

Currently Adidas has a price-earnings-ratio of 24, which is quit high, because the average price-earnings-ratio of all DAX companies is currently 16.

When it comes to work out how profitable a company is, investors are always looking at the return on equity, because at the end all investors want to invest only in profitable companies. In 2014 Adidas had a return on equity of 8.7% and this ratio is also not very convincing, because the average return on equity of all DAX companies was over 10% in 2014. At the same time the ROE of Adidas decreased 30% over the last 5 years.

 

Adidas_figure3_englisch

 

 

Even more badly is the developing over the last 8 years because in 2007 Adidas was able to generate a very strong ROE of 18%.

If you look at the ROE you should also look at the equity ratio to find out how stable the financial situation of the company is and how large the leverage is. Right now Adidas has an equity ratio of 45% which is quit high, because the average equity ratio of all DAX companies is just 29%. The corporation was able to maintain this high equity ratio between 43%-47% over the last 5 years.

The equity ratio is a very important key figure, but investors have usually different opinions on it. One the one hand a company needs a very solid equity ratio to maintain a good financial stability during a recession, but one the other hand the equity ratio should not be to high, because it ́s not so easy for a company to generate a good return on equity with a high equity ratio.

Currently shareholders of Adidas are looking forward to get a dividend yield of 2,1% which is exactly the average of all DAX companies. It is positive that the corporation increased the dividend from 0.5 € to 1.5 € per share over the last 8 years, but it is very doubtful whether this trend is going to continue because we have already seen that both sales and profits are stagnating.

The Adidas stock has improved by 80% over the last 5 years, which is a little bit weaker than the DAX, which increased over 90% during that time. However the development of the stock during this time should be a clear alert signal, because until summer 2014 Adidas was a outperformer in the DAX and increased twice as high as the DAX from the year 2010.

Investors had very high expectations on the stock because of the soccer World Cup in 2014, but Adidas was not able to met those expectations and was sold off by the market during the second half of 2014.

 

The key financial figures of Adidas are showing some weakness. On the one hand the sales and profits are stagnating at the moment and on the other hand the company also has a higher price-earnings-ratio (24) than the market (16).

Adidas has a very high equity ratio, which gives the company a good financial stability but at the same time the return on equity has been in a down-trend over recent years. The dividend yield is only average and due to stagnating profits the company will not be able to increase the dividend.

 

 

Adidas vs. Nike

 

Adidas is the second largest sports-equipment manufacturer in the world behind Nike, but we have already seen, that Adidas is right now not able to grow. At the same time Nike was able to increase it´s revenue from $18.3 billion up to $27.8 billion over the last 5 years, which represents a growth of 52%.

 

Adidas_figure4_engisch

 

The net profit of Nike also increased by 42% during this period, which makes the view on the financial ratios of Adidas even more worse.

Thereby it was Adidas, which had very ambitious goals, because over 5 years ago, the company announced the “Route 2015” where Adidas wanted to increased it´s net profit by 15% every year and wanted to generate revenue of 17 billion euro in 2015. The company missed these goals, instead it´s Nike, which is constantly growing year by year.

A significant different between those two companies is the sponsoring: Since many years Nike is able to get the top athletes under contract and is willing to spent a lot of money. Currently Nike has for example athletes like Michael Jordan (Nike Air Jordan), Lebron James, Roger Federer, Rafael Nadal, Tiger Woods and Cristiano Ronaldo under contract.

Roger Federer is getting e.g. $130 million for 10 years from Nike.

These sponsoring contracts pay off for Nike, due to those very special and famous personalities people are willing to buy the products from Nike. Only with the shoes of Michael Jordan (Nike Air Jordan) Nike generated between $2 and $2.5 billion every year over the last 5 years.

When Nike presented a new pair of shoes from Air Jordan last year, the company sold over 480,000 units in just 3 hours and generated $80 million in such a short time.

 

 

Global economy

 

 

Adidas_figure5_englisch

 

 

The picture above shows that Europe and the US are the most important markets for Adidas in which the company is generating 50% of it´s revenue.

In Europe the company made 29% of it ́s revenue last year. Right now the Eurozone has a lot of problems and the economy has still not recovered from the last recession and the unemployment rate is over 10% At the same time Greece is also a large uncertainty.

Therefore and because of the risk of deflation the European Central Bank decided to start with a large quantitative easing program whereby the EZB will buy private and public bonds for more than 1.000 billion euro to bring the European economy back on track. But this is no guarantee that the European economy will get stronger.

Currently the economic situation in the US is quit good and can convince in contrast to Europe or Asia. Right now the US economy is growing very strong due to the very good labor market conditions. The US is depending very much on the labor market because it ́s primarily a consumer society and because of that it is very important that a lot of Americans have a constant income.

However the US might see the very first rate hike by the Federal Reserve in 7 years and there is legitimate concern that the economy could grow more slowly over the next years.

Although China is not the most important market for Adidas, however, still need to get mentioned in a global analysis, as the Chinese economy is probably the most important factor for the global economy. China is growing as slow as over the last 25 years and a lot of investors expect that the Chinese Central Bank will cut interest rates over the next months.

Currently the situation on the stock market is not so easy to evaluate, because although there are some question mark in the global economy, a lot of indices are at their all time high and a correction is more than ever likely to happen.

However this correction might get happen a little later at some point in the future due to the ECB QE-Program. If the stock market would do a correction, almost every stock would also decrease. That ́s why it is important to find out how much a stock is depending on the market movements.

A good financial ratio to find out this is the beta-factor, which indicates the systematic risk of a stock. This ratio shows how volatile a certain stock behaves in comparison to the overall market. If the market makes a movement of 20% and one certain stock also moves 20%, this stock has a beta-factor of 1. If this stock would have made a 30% movement, the beta-factor would be 1,5.

Over the last 5 years Adidas had a beta of 1,24, which is quit high and even if we look at a shorter time horizon we still get the same result, because over the last 6 months the company had a beta of 1,25.

This means that the Adidas stock is reacting quit high on market movements and that means the stock is more risky than other stocks.

 

 

Conclusion:

 

Adidas_figure6_enlgisch

 

 

Our analysis is not showing a good picture of Adidas. The stagnation in sales and net profit is already an alert sign for many investors because investors want to invest their money in companies that are able to grow in the future. Besides that Adidas also has a very high price-earnings-ratio (24) which shows that the stock might be a little overbought at the moment.

We also saw that the main rival Nike is showing some strong growth over the recent years and at the same time Nike as managed to take all top athletes under contract, which is one important difference between Adidas and Nike.

The high beta of 1.25 also shows that the stock is more risky for investors because in the case of a stock market correction the Adidas stock could fall even stronger.

 

 

Mid- and long-term outlook:

 

Due to the current monetary policy of the ECB the European stock market could continue to rise and that means Adidas shares might also continue to go up. However if this happens it is hard to think about a fair stock valuation, as Adidas is already a little overpriced and that means right now Adidas is not a good investment for long-term investors.

Of course some corporate news, like quarterly earnings can change the picture again, but right now Adidas is not a lucrative investment.

 

 

 

 

 

Timeframe: short- mid-term

 

 

Overview:

 

Google is one of the most famous brands in the world and one of the leading global technology company. Beside the well-known search website, the corporation also offers other products or services such as the email service Gmail, the social networking platform Google+ and the Google Chrome web browser. In addition, the company als offers the geographical products Google Earth and Google Maps, and also hardware and software for smartphones and tablet computers. Google is also selling it´s own smarthphone (Nexus).

 

Since the beginning of 2015 the stock has established an uptrend, which is now in a correction (figure a).

 

figure a

figure a

 

 

We will now look at different scenarios, that might happen in the near future.

 

Scenario 1, figure b/c:

 

In figure b we see that the price has exactly arrived at the support zone. This consists of the 200 SMA and the recent high of the supporting trend line.

The first possibilty would be that the stock would bounce back from this support area and would go up to the last high (figure b).

 

figure b

figure b

 

 

A second possibility would be that the stock would make a larger correction before it goes up again (figure c).

 

figure c

figure c

 

 

Scenario 2, figure d:

 

An alternative scenario would be that the stock could also make a short scenario whereby the price would break through the current support zone. In this scenario the volume could rise again and the uptrend would come to an end.

We could perhaps see this new downtrend because right now the MACD is overbought.

 

figure d

figure d

 

 

Conclusion:

 

Right now we see an uptrend so we are looking for long trades. As long as the mentioned support zone is not broken, the bulls are in control.

It is also very important for a trader to look at the fundamental datas, as the company might release some very important press releases like quarterly earnings.

Especially since Google is well-know, the stock is not only traded by professional, but also by non professional traders. That means some news or rumors can have an impact on the stock price.

 

Disclaimer: Disclosure according to § 34b WpHG due to potential conflicts of interest:
The author is invested in the relevant securities or underlying securities at the time of publication of this Analysis

 

 

 

 

Timeframe: short-, mid-term

 

Overview:

Zions Bancorp. is a US corporation that operates in the banking business. The activities of the financial group includes the traditional banking services for private and corporate clients e.g. loans for companies, real estate morgages and investment products.

Since march 2014 the daily chart shows us a long-term downtrend which takes place in a trend channel.

 

figure a

figure a

 

 

In picture b we can also see some more points that support the short scenario:

1. The price is under the 200 SMA.

2. The volume is higher when the price goes down.

3. MACD is oversold.

 

figure b

figure b

 

Scenario 1, picture c:

 

In picture c we see a massive resistance zone, which includes the trend channel, the 200 SMA, the red trend line and the last highs around the area at $28,70 and $29,00.

 

figure c

figure c

 

 

The arrows show the possible processes of the stock. The main target is between $23,00 and $24,00. In this area we can see a strong support zone. Here the price could turn again to continue it´s run inside the trend channel or the stock could also break through this zone. Accordingly, a trader should be prepared for both situations.

 

Scenario 2, picture d:

Alternatively, the stock can also be traded long when it would leave the trend channel upward. Then the previous resistance zone would act as a support zone and we would also have some very attractive targets.

The picture d shows the possible direction of the stock.

 

figure d

figure d

 

 

Conclusion:

 

As long as the price does not leave the trend channel upward, the stock is a clear short candidate. The indicators we dicussed support this short scenario.

The trader should also pay attention to corporate reports and other news that may impact the stock price.

 

 

Disclaimer: Disclosure according to § 34b WpHG due to potential conflicts of interest:
The author is invested in the relevant securities or underlying securities at the time of publication of this Analysis