Impressive Breakout on Heavy Volume After Offering More Shares Thursday, April 05, 2007 - CANSLIM.net |
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View all notes | Alert me of new notes | CANSLIM.net Company Profile CANSLIM.net Profile: Vocus, Inc. provides on-demand software for public relations management. Its software automates and integrates various functions of public relations, including media relations, news distribution, and news monitoring. The company's public relations management software modules include Contact Management, which allows customers to access a database of journalists, media outlets, and publicity opportunities, as well as to create targeted lists, fax or mail, and track meetings and telephone calls; and Collateral Management that provides a repository to store information, such as media kits, photographs, videos, annual reports, and executive biographies. It also offers Project Management that facilitates organizing press releases, speaking engagements, and publicity events; Newsrooms, which provides access to an organizations news, press releases, digital collateral, grassroots advocacy tools, and other public information for journalists, analysts, and public officials; and PRWeb Online Newswire that distributes news directly to online news sites, and to the public through daily RSS feeds and other social media tools. Email Campaigns, which enables organizations to deliver interactive communications that provide online access to related collateral material, and to track and measure response rates and other campaign metrics; Analytics & Measurement that transforms data about news coverage, public relations activities, and online newsroom statistics into insight about programs and results; and News On-Demand, which monitors news sources to identify and deliver relevant news coverage to customers based on individual criteria. As of December 31, 2006, Vocus served 1,727 customers in financial and insurance, technology, healthcare and pharmaceuticals, and retail and consumer products industries, as well as government agencies, not-for-profit organizations, and educational institutions. The company is headquartered in Lanham, Maryland. From when it first turned a profitable quarter in the period ending December 31, 2005 its earnings have increased dramatically versus the year earlier in its quarterly comparisons (the "C" criteria) yet the company just turned profitable in 2006 so it lacks the annual earnings history (the "A" guideline) of at least 3-5 years of earnings growth. The "I" criteria is clinched by the number of top rated funds owning an interest rising from 15 funds in March '06 to 27 funds as of December '06, and its bullish price/volume chart action shows that its shares are being accumulated. VOCS is a member of the 16th ranked Computer - Software/Enterprise out of the 197 Industry Groups covered in the paper, easily satsifying the "L" criteria. In addition, the company provides News Headline of Note: The company, with the help of underwriters, announced today that it had priced a previously announced follow-on public offering of about 3.05 million shares at $19.50 a share. About 1.8 million shares were being sold by stockholders and about 1.2 million were being offered by the company (read here). The market has immediately shown great enthusiasm to this news, which appears to have relieved selling pressure from insiders and also given the company some additional working capital. News that is fundamental in nature often can have a quick impact on share prices, as this example demonstrates. What to Look For and What to Look Out For: For the best results it is often wise to avoid buying stocks extended beyond guidelines, so be careful not to buy this stock if it surges above its $23.01 maximum buy price. VOCS triggered a technical buy signal when it vaulted above its pivot point on well over the +150% above volume. Look for this stock to continue advancing in the next few days and weeks on heavier volume. Conversely, VOCS rolls over and falls back into its prior base then the recent bullish action will be negated. Any serious reversal and technical breakdown beyond 7-8% from one's purchase price would serve as a decisive technical sell signal. Technical Analysis: The stock surged above its resistance and its pivot point today on the necessary volume to trigger a technical buy signal. Whenever a stock jumps into new high territory on heavy volume it is a classic sign of heavy institutional buying demand (the "I" criteria). At the time of this writing volume is over 959,300 shares traded on a stock that normally trades about 100,900 shares daily. The breakout to new all-time highs may be the beginning of a substantial and sustained rise, which is why there is always a focus on stocks with very heavy volume behind a meaningful rise in price. Its weekly chart also has bullish characteristics that include several up weeks on above average volume with only one or two down weeks on above average volume. |
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