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Taking a fresh technical look at Western Digital Corp. (NASDAQ: WDC)

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It’s time to take an in-depth technical look at Western Digital Corp. (NASDAQ: WDC) . Our goal here today is to examine how the stock is behaving so we can use that examination as a lens through which to evaluate the stock as a possible investment opportunity.

Technical analysis is predicated on the idea that all important information is already interpolated by buyers and sellers of a security, so the only thing left to really interpret and predict the action is that behavior itself. For market timers, one of the most important tools we have at hand is the key indicators that show whether the stock is stretched in one direction or the other too much, too far, or too fast. In other words, is the stock overbought, oversold, or somewhere in the middle?

For that, we first turn to the RSI measure. The 14-day RSI is the standard flag-bearer for this type of analysis. Right now, for Western Digital Corp., the measure stands at 47.10%. That shows where the stock is as far as the degree to which it is becoming overbought or oversold relative to its price history.

If we look at other overbought/oversold oscillators, we can get even more perspective. The stochastic measure is a good example. Right now, the stock over the past month of action shows a score of 31.67% on the 20-day fast stochastic.

In an even broader sense, NASDAQ: WDC has recently been showing trading action that suggests an overall bullish posture on the chart according to trend-related measures such as a major moving average. In this case, we are looking at the relative positions of the 50-day and 200-day simple moving averages. The implication, of course, is that money is generally treating this stock in a positive manner in terms of capital flows.

Next, we want to look at participation levels. Our conviction on a stock in terms of its technicals is almost entirely subject in the end to the type of volume of trade we see going on in the stock. Patterns of action gain meaning strictly through volume levels. In other words, you need plenty of people playing the game for the score to matter. At this point, relative volume measures have been weak, indicating lack of interest among traders, investors, and money managers for the stock over the past month. As it stands at present, the stock might find important action around key levels on the chart, which is something else we like to take a close look at.

One of the best ways to define key levels is through derivations built off of the Fibonacci series. This is widely used by professional firms in the market. The Fibonacci series is a set of numbers derived from adding the prior number to the next one: 0,1,1,2,3,5,8,13,21,34, etc. You will note that each number is the sum of the prior two numbers. The series has been found to exemplify the mathematics underlying many growth systems. The ratio of one number to the next in the series approaches 61.8% (or 38.2%, depending on which direction you move) as a limit. In markets, the key levels are often played at retracements defined by this ratio and its associated connections. In this case, the critical 38.2% level drawn off the 52-week high of $95.77 sits at $79.09. NASDAQ: WDC also has additional resistance above at the stocks 200-day simple moving average, which sits at $ 82.55.

So far, we have looked at oscillators, moving average trends, and participation levels. However, sometimes, there is information carried in simply the degree of movement in a stock. For example, over the past trading month, NASDAQ: WDC has made a move of -2.97. By comparison, over the trailing 100 days, the stock is underperforming the S&P 500 by 5.4, and its gotten there by action that has been more volatile on a day-to-day basis than most other stocks on the exchange.

Obviously, that tells us a ton about this name. To even drill down deeper into the movement, we can see that the stocks recent action has come on a historical volatility score of 27.80%. That number is derived from the standard deviation of returns of some hypothetical trader buying the stock at a given average price during the specified period. If we want to look at range of action in a simplistic sense, the best way is to use the average true range over the most common reference time period, so we are staying on the same page with the market. In this case, the 20-day ATR as a percentage of its 20-day moving average comes in at 3.02%.

We plan to update our take on this stock as its pattern of behavior progresses from here.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of argusjournal.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please click HERE

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Atlas Cloud Enterprises Inc (OTCMKTS:ATLEF) Could be Emerging as an Interesting Crypto Mining Pure Play

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Atlas Cloud Enterprises Inc (OTCMKTS:ATLEF) should not be overlooked by traders and investors interested in pure-play opportunities in the fascinating cryptocurrency mining market space. The company is an emerging player as, effectively, a pick-and-shovel play for entrepreneurs looking to become cryptocurrency mining professionals. The stock is beginning to pick up increasing liquidity in recent days as traders start to discover the story. The company has also been making some key moves, which has helped to foment new enthusiasm.

As a case in point, Atlas Cloud just announced the appointment of Mr. Charlie Kiser to the position of Chief Executive Officer. In addition, the company also announced that Fred Stearman, who was interim acting CEO, would be moving into the role of Chief Operating Officer.

Mr. Stearman notes, “I am delighted to welcome Charlie to the team and look forward to working closely with him as we move ahead with our strategic plans for 2018 and beyond. It’s an exciting time in our industry, and today’s announcement is further evidence of our commitment towards building a sector-leading concept and company aimed at increasing shareholder value.”

Atlas Cloud Enterprises Inc (OTCMKTS:ATLEF) offers tailored Colocation and flexible Cloud Computing options for small and medium businesses in Western Canada.

Basically, the company provides co-location, back-up/redundancy IT, telecom equipment, and cloud computing services to small and medium size businesses in Western Canada. The company offers committed space to startup technology companies, such as providing desks, chairs, high-speed Internet, meeting rooms, relevant workshops, and other office infrastructure required by such companies to grow and compete in the technology sector.

Atlas Cloud Enterprises Inc. is headquartered in Vancouver, Canada.

According to company materials, Atlas Cloud Enterprises Inc. is a growth-oriented, CSE-listed company focusing on the business of providing co-location and backup/redundancy IT, telecom equipment and cloud computing. Atlas Cloud will provide customers with secure power access, cooling and bandwidth to ensure co-located, back-up or Cloud systems offer minimum risk of failure. Furthermore, Atlas is focused on the blockchain sector and digital currency mining. Atlas Cloud aims to become the lowest-cost producer of digital currency mining and blockchain infrastructure.

Atlas Cloud owns a facility currently undergoing preparations for use as a digital currency mining operation located in Electric City, WA. This location currently benefits from a dedicated low-cost energy source of 3.0 MW and the Company is seeking to significantly expand its operations with the development of additional facilities offering economical, high-yield energy infrastructure opportunities.

According to the release, “Mr. Kiser is a cryptocurrency and technology veteran. Along with his 20 years of technology experience, Charlie recognized and advocated for the disruptive potential of cryptocurrencies and blockchain in 2014 when he helped take the first pure-play bitcoin and blockchain company public in North America. As the earliest public crypto company, they leveraged both an operational and holding company strategy, investing in 4 crypto start-ups; GoCoin, covering payment processing; Coin Outlet, a bitcoin ATM and distribution network; Gem, a multi factor authentication wallet, and Expresscoin, a retail cryptocurrency outlet. The company built out one of the largest eCommerce platforms that accepted digital currencies, and ultimately moved into the emerging industrial cryptocurrency mining space.”

On the financial side, ATLEF has about $1.9M in cash on the books, which stands against about $124K in total current liabilities. The company has pulled in about $365k in trailing twelve month revenues, with growth on the top-line on a quarterly year/year basis running along at a healthy 35% clip. The market now values the stock at a market cap of $12.1M.

 

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of argusjournal.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please click HERE

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How Well Do You Know Mondelez International, Inc. (MDLZ) ?

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Stock of Mondelez International, Inc. (MDLZ) opened at $41.05 and last traded at $41.09 x 700. More than 3,500,771 shares exchanged hands compared to an average daily volume of 9,726,262 shares. At the current pps, the market capitalization stands at 61.233B.

Let’s take a look at how the stock has performed this year so far. Mondelez International, Inc has moved 1.43% in the last 5 days or -5.53% in the last 1 month. In long-term, Mondelez International, Inc has changed -3.31% in 3 months and  -6.45% in this year itself. Below is the chart to get a feel for the recent price action.

 

Fundamentals you simply cannot ignore

Investors try to use stocks with high beta values to quickly recoup their investments after sharp market losses. Mondelez International, Inc. (MDLZ) currently has a Beta value of 0.98 . Beta is a measurement of a stock’s price fluctuations, which is often called volatility and is used by investors to gauge how quickly a stock’s price will rise or fall. A stock with a beta of greater than 1.0 is riskier and has greater price fluctuations, while stocks with beta values of less than 1.0 are steadier and generally larger companies. Beta is often measured against the S&P; 500 index. An S&P; 500 stock with a beta of 2.0 produced a 20 percent increase in returns during a period of time when the S&P; 500 Index grew only 10 percent. This same measurement also means the stock would lose 20 percent when the market dropped by only 10 percent. Next, let’s take a look at Mondelez International, Inc current P/E ratio. Mondelez International, Inc. (MDLZ) currently has a PE ratio of 21.55. PE ratio is an important parameter to look at when trading a stock mostly because it is easy to calculate. There are a couple of ways to calculate PE ratio either by dividing share price by earnings per share or dividing the market cap by net income. It is important to note that the earnings are usually taken from the trailing twelve months (TTM). Nevertheless, P/E tells us how much an investor is willing to pay for $1 of a company’s earnings. The long-term average P/E is around 15, so on average, investors are willing to pay $15 for every dollar of earnings. Another useful way to look at this: Turn the P/E ratio around to look at the E/P ratio, which when expressed as a percentage gives us the earnings yield. For instance: 1/15 gives us an earnings yield of 6.67%.

While we have already looked at Mondelez International, Inc beta and P/E ratio, the EPS cannot be ignored. Mondelez International, Inc EPS for the trailing twelve months was 1.91. Traders and investors often use earnings per share (TTM) to determine a company’s profitability for the past year. So in essence, EPS is the amount of a company’s net income per share of common stock. Earnings per share equal the company’s net income less any dividends paid on preferred stock divided by the weighted average number of common stock shares outstanding during the year. Mondelez International, Inc is estimated to release its next earnings report on 12 / 2018 (N/A-Not know at this time). It would be interesting to see how the earnings fair out considering the recent developments.

The Analyst Chirp:

Mondelez International, Inc. (MDLZ) has received an average target price from analysts of $51.49 amounting to a recommendation rating of Buy. That comes from 24 different analysts. Perhaps, the driver for that assessment comes from the company’s valuations. Right now, we are looking at a median price-to-earnings ratio for this calendar year of 16.91. To give a sense of trend, the same data point on the estimate for next year is currently sitting at 15.54 times earnings. Drilling down a bit further, this quarter, we are looking at an average estimate from analysts for earnings per share level of 18.00. That shift to 18.00 heading into next quarter.

 

 

 

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of argusjournal.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please click HERE

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Spotlight on The Kraft Heinz Company (KHC)

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In the ever-evolving process of understanding what a stock is truly worth, we are going to look at The Kraft Heinz Company (KHC) today from the standpoint of its EV/Rev ratio to see just what the company’s current market valuation implies about its worth as a take-out candidate. The EV/Rev ratio is also known as the Enterprise Value-to-Revenue ratio. It’s an alternative to price-to-sales that offers advantages by accounting for cash and debt.

In fact, one might suggest that the best way to achieve this is through taking a look at the company’s price-to-sales ratio (in this case, we are talking about 2.79). However, the problem with this measure, as noted above, is that it doesn’t consider the balance sheet as a tangible item.

For example, if you were to walk into company headquarters tomorrow and negotiate a deal to outright purchase The Kraft Heinz Company (KHC), you would know you were going to own the company’s cash, and also take on its liabilities as your own. So, the balance sheet is part of the value of the company, and there’s no getting around it.

That’s why we might consider the company’s enterprise-value-to-revenue ratio as a superior means of valuing its current operational flows than price-to-sales. And in today’s innovation-driven market, operational flows seem to rule the day.

In this case, The Kraft Heinz Company (KHC) is currently in possession of an enterprise value of 103.68B. That number is derived from the company’s market cap (which is currently at 73.127B) minus its cash and equivalents (which currently sit at roughly 1.63B) plus its outstanding debt (now at 31.54B). Occasionally, you will see this number include minority interest and preferreds. However, let’s keep it simple today.

That gives us one half of the equation. The other half is the trailing-year revenues. For The Kraft Heinz Company (KHC), we are talking about 26.23B. We use the trailing revenues to avoid having to consider potential inflections in the environment or flaws in company or analyst outlooks. 

When we put them together, we get an EV/Rev ratio of 3.95.

It has been suggested that this method of valuing stocks struggles with unproven names such as penny stocks because they often have a checkered history in terms of operational success, and therefore, can end up with negative enterprise value. In other words, they have such small market caps that the balance sheet becomes the principal factor in the equation. And balance sheets can be highly variable from stock to stock in ways that may be misleading when trying to chase down the concept of “intrinsic value”.

Otherwise, investors may prefer other means of attempting to nail down the value of The Kraft Heinz Company (KHC), including standard forward P/E (which comes in at 14.74), trailing P/E (which comes in at 6.70), price-to-sales, as we noted above (coming in at 2.79, price-to-book (which currently sits at 1.11), and enterprise value-to-EBITDA (12.47) — which represents the ratio of the EV to the company’s earnings before interest, taxes, depreciation, and amortization.

In any case, however you choose to nail down the valuation of a company, you are probably first going to need to admit that there is no one perfect answer.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of argusjournal.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please click HERE

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