EGOV needs to rebound above its 50 DMA line for its outlook to improve. Subsequent gains for new highs may offer proof of fresh institutional buying demand that could lead to a sustained and meaningful advance in price. EGOV made only limited progress since highlighted in the 10/18/13 mid-day report (read here) in yellow with an annotated daily graph. One flaw that has developed is that its Relative Strength (RS) rating has slumped to 73, below the 80+ minimum guideline for buy candidates. The stock has earned a high 98 Earnings Per Share (EPS) rating. The company recently reported earnings +44% on +15% sales revenues for the Sep '13 quarter, marking its 4th consecutive quarter with earnings above the +25% minimum guideline (C criteria). However, it was previously noted - "Blue triangles beside the quarterly and annual earnings figures within the datagraphs used by CANSLIM.net experts indicate pre-tax, non-recurring items were included (where possible, such items are normally removed to provide data better suited for comparison)."

The number of top-rated funds owning its shares rose from 223 in Dec '12 to 261 in Dec '13, a somewhat reassuring trend concerning the I criteria. The Computer - Tech Services group has a 93 Group Relative Strength Rating, encouraging news concerning the L criteria. Its small supply of only 65 million shares (S criteria) outstanding can contribute to greater price volatility in the event of institutional buying or selling. Its Accumulation/Distribution rating has also slumped to E, the worst possible rating.

NIC Inc. (EGOV +$0.51 or +2.13% to $24.49) was last shown in this FSU section on 11/25/13 with an annotated weekly graph under the headline, "Finding Support Near 50-Day Average During Distributional Pressure". It had sputtered below its 50-day moving average (DMA) line in the interim, then a volume-driven gain above that short-term average last Friday helped its technical stance improve.  Very little resistance remains due to overhead supply. Subsequent gains for new highs may offer proof of fresh  institutional buying demand that could lead to a sustained and meaningful advance in price. 

EGOV made only limited progress since highlighted in the 10/18/13 mid-day report (read here) in yellow with an annotated daily graph. One flaw that has developed is that its Relative Strength (RS) rating has slumped to 76, below the 80+ minimum guideline for buy candidates. The stock has earned a high 98 Earnings Per Share (EPS) rating. The company recently reported earnings +44% on +15% sales revenues for the Sep '13 quarter, marking its 4th consecutive quarter with earnings above the +25% minimum guideline (C criteria). However, it was previously noted - "Blue triangles beside the quarterly and annual earnings figures within the datagraphs used by CANSLIM.net experts indicate pre-tax, non-recurring items were included (where possible, such items are normally removed to provide data better suited for comparison)."

The number of top-rated funds owning its shares rose from 223 in Dec '12 to 249 in Sep '13, a somewhat reassuring trend concerning the I criteria. The Computer - Tech Services group has a 95 Group Relative Strength Rating, encouraging news concerning the L criteria. Its small supply of only 65 million shares (S criteria) outstanding can contribute to greater price volatility in the event of institutional buying or selling.

NIC Inc. (EGOV +$1.95 or +8.46% to $24.99) has been finding support near its 50-day moving average (DMA) line, but volume was running at an above average pace behind recent damaging losses, meanwhile its latest gains have lacked great volume conviction. No resistance remains due to overhead supply, however, the weekly and daily graphs below illustrate the distributional action of late. Disciplined investors always limit losses by selling any stock that falls more than -7% from their purchase price. 

EGOV was last shown in this FSU section on 10/18/13 with an annotated weekly graph under the headline, "Technical Breakout From "Double Bottom" Base on 3 Times Average Volume", after highlighted in the earlier mid-day report (read here) in yellow with an annotated daily graph showing the pivot point based on its 10/02/13 high. It recently reported earnings +44% on +15% sales revenues for the Sep '13 quarter, marking its 4th consecutive quarter with earnings above the +25% minimum guideline (C criteria). However, it was previously noted - "Blue triangles beside the quarterly and annual earnings figures within the datagraphs used by CANSLIM.net experts indicate pre-tax, non-recurring items were included (where possible, such items are normally removed to provide data better suited for comparison)."

The number of top-rated funds owning its shares rose from 223 in Dec '12 to 241 in Sep '13, a somewhat reassuring trend concerning the I criteria. The Computer - Tech Services group has a 95 Group Relative Strength Rating, encouraging news concerning the L criteria. Its small supply of only 65 million shares (S criteria) outstanding can contribute to greater price volatility in the event of institutional buying or selling.

NIC Inc. (EGOV +$1.95 or +8.46% to $24.99) was highlighted in the earlier mid-day report (read here) in yellow with an annotated daily graph showing the pivot point based on its 10/02/13 high. Its volume-driven gain today was backed by more than 3 times average volume, triggering a technical buy signal. While forming the second low it undercut the 50-day moving average (DMA) line and briefly dipped below its September low before rebounding. The fresh breakout came from a "double bottom" base formed since last noted in the 8/20/13 mid-day report with caution - "Reported earnings +78% on +27% sales revenues for the Jun '13 quarter, marking its 3rd consecutive quarter with earnings above the +25% minimum guideline (C criteria). However, blue triangles beside the quarterly and annual earnings figures within the datagraphs used by CANSLIM.net experts indicate pre-tax, non-recurring items were included (where possible, such items are normally removed to provide data better suited for comparison). EGOV found support at its 200 DMA line during its consolidation while building a cup-with-handle base since last noted in the 4/01/13 mid-day report with caution - No resistance remains due to overhead supply. Quarterly and annual earnings (C and A criteria) history has not been strong and steady, and it is fundamentally not a good match with the guidelines of the fact-based investment system.'"

 It was last shown in this FSU section on 7/03/06 with an annotated graph under the headline, "Broker Downgrade Hurts Leading Stock", as it got smacked on a broker downgrade. It survived and started making better progress over the past year. The number of top-rated funds owning its shares rose from 223 in Dec '12 to 241 in Sep '13, a somewhat reassuring trend concerning the I criteria. The Computer - Tech Services group has a 90 Group Relative Strength Rating, encouraging news concerning the L criteria. Its small supply of only 64.9 million shares (S criteria) outstanding can contribute to greater price volatility in the event of institutional buying or selling.

C A N S L I M | StockTalk | News | Chart | SEC | Zacks Reports

View all notes | Alert me of new notes | CANSLIM.net Company Profile

C A N S L I M | StockTalk | News | Chart | SEC | Zacks Reports

 View all notes | Alert me of new notes | CANSLIM.net Company Profile

CANSLIM.net Profile: NIC Inc. provides portal outsourcing and related software and services for eGovernment, helping governments use the Internet to reduce costs and provide a higher level of service to businesses and citizens. NIC enters into contracts primarily with state governments, and designs, builds and operates Web-based portals on their behalf. The Company's portals consist of Websites and applications that it builds, which allow businesses and citizens to access government information online and complete transactions, including applying for a permit, retrieving driver's license records or filing a form or report. NIC manages operations for each contractual relationship through separate local subsidiaries that operate as decentralized businesses with a high degree of autonomy. The company has increased its earnings by +33%, +33%, +33% and +25% in the past four quarterly financial reports for Jun, Sep, Dec '05 and Mar '06 respectively. The annual earnings history (the “A”) has shown solid increases in the past three years, a 45% Growth Rate, which helps reassure investors of strength in the underlying fundamentals of the company. Return on Equity of 12% falls a bit under the +17% guideline. Management owns an impressive +38% of the float which helps align their interests with those of their shareholders.  The Computer-tech Service group is now ranked 49th of 197 Industry Groups, putting it on the edge of the top quartile, thus confirming there is decent group leadership to fulfill the "L" criteria. 

What to Look For and What to Look Out For:  Now that EGOV has reached new high territory on above average volume and has decisively passed through its pivot point, odds favor further gains. It is important not to buy any stock extended too far above its pivot point.  Investors should always look out for a failed breakout, so if EGOV fails to follow through and rolls back it would give rise to concern.  If dropping into its prior base to close under its March 20th, 2006 high close of $6.53, that would technically negate the recent breakout. Then the odds of a sustained rise and meaningful gains would be greatly reduced. Alway limit losses per the 7-8% sell rule, and never hold a stock if it falls more than that much from your purchase price.  Another concern is that, even while more meaningful revenue growth has continued on a percentage basis versus the year ago quarters, sequentially speaking, the company's sales revenues have been locked in the $15-16 million range for the past 4 reports.  Flatter comparisons in the coming quarters would likely prompt disappointment.