NEW YORK (TheStreet) -- Good day, traders!
1. First, let's look at Alcoa, which produces and manages primary aluminum, fabricated aluminum and alumina. TheStreet Ratings has a buy rating on this stock.
Alcoa traded up 0.4% on Wednesday, closing at $16.50.
- Wednesday's range: $16.36 - $16.69
- 52-week range: $7.68 - $17.22
- Wednesday's volume: 13,097,682
- Three-month average volume: 15,046,900
Alcoa looks good as a pullback opportunity. Shares had traded down to below the 20-day simple moving average and consolidated around the $16.20 area. Over the last couple of days, shares have inched up, and on Wednesday they closed above the 20-day simple moving average. Plus, Wednesday's price action formed a bullish engulfing signal, which is always a good candlestick signal to trade. We'll need to see confirmation Thursday, but even if Thursday sees the chart form a doji and shares consolidate above the 20-day simple moving average, this looks like a good chart to be in on the dip.
I would look to enter this trade above the 20-day SMA, anywhere above $16.45. I would prefer to buy on strength to the upside. I would set a stop at around $16.11. I would target the 52-week high at $17.22, but ultimately I think Alcoa is a great chart to let ride, as shares are up nearly 60% this year, with no signs of stopping.
Alcoa is a great chart to buy on the dips and take partial profits on at the top. Stay long until you see a sell signal or a close below the t-line.
2. Now, let's look at IsoRay, which develops, manufactures and sells isotope-based medical products and devices for the treatment of cancer and other malignant diseases, primarily in the U.S.
IsoRay traded up 4.5% on Wednesday, closing at $2.55.
- Wednesday's range: $2.40 - $2.58
- 52-week range: $0.44 - $3.77
- Wednesday's volume: 1,528,946
- Three-month average volume: 1,937,080
IsoRay is another pullback opportunity. IsoRay shares have traded back below the 20-day simple moving average and the 34-day exponential moving average, offering a cheaper entry price. Over the last few weeks, shares have been hovering around the same price and not really moving much, but on Wednesday the stock closed over the 20-day simple moving average, piquing my interest.
I'd look to enter this trade above the 20-day simple moving average, at or above $2.49. I'd set a stop at $2.36 or so. I would target the near-term high of about $3.09, which is about 20% to the upside. Even if you target half of that, at about $2.83, that is a quick 10%. Stay long until you see a confirmed sell signal or a close below the t-line.
3. Lastly, let's look at SodaStream, which develops, manufactures and markets home beverage carbonation systems and related products.
SodaStream traded up 4.8% on Wednesday, closing at $34.33.
- Wednesday's range: $32.45 - $34.85
- 52-week range: $28.65 - $69.78
- Wednesday's volume: 1,692,205
- Three-month average volume: 1,098,550
SodaStream is back on the buy list, as it became a rounded-bottom breakout Wednesday when it closed over the 50-day simple moving average. Back on July 30, SODA reported positive earnings and has been trading up 10% to the upside since. SodaStream is in a short-term uptrend, and Wednesday the price cleared near-term resistance levels and will likely offer a cheaper entry Thursday, because it traded up almost 5% Wednesday.
I'd look to enter SodaStream above the 50-day simple moving average at or above $32.81. I'd set a stop at about $31.94, which is the near-term low. I will target the 200-day simple moving average, which is 20% to the upside. There are other potential targets. The first is $37.79, which is an overhead resistance level, and is 10% from Wednesday's close. The other is $39.53, which would offer a 15% gain.
Stay long until you see a confirmed sell signal or a close below the t-line.
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Now let's look at TheStreet Ratings' take on some of these stocks.
TheStreet Ratings team rates SODASTREAM INTERNATIONAL LTD as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate SODASTREAM INTERNATIONAL LTD (SODA) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.3%. Since the same quarter one year prior, revenues slightly increased by 6.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- SODA's debt-to-equity ratio is very low at 0.11 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.02, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for SODASTREAM INTERNATIONAL LTD is rather high; currently it is at 52.75%. Regardless of SODA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SODA's net profit margin of 6.54% compares favorably to the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 49.93%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 28.33% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, SODA is still more expensive than most of the other companies in its industry.
- SODASTREAM INTERNATIONAL LTD's earnings per share declined by 28.3% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, SODASTREAM INTERNATIONAL LTD reported lower earnings of $1.96 versus $2.09 in the prior year. For the next year, the market is expecting a contraction of 4.8% in earnings ($1.87 versus $1.96).
- You can view the full analysis from the report here: SODA Ratings Report
TheStreet Ratings team rates ISORAY INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ISORAY INC (ISR) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, poor profit margins and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Biotechnology industry. The net income has significantly decreased by 191.3% when compared to the same quarter one year ago, falling from -$0.72 million to -$2.08 million.
- The gross profit margin for ISORAY INC is rather low; currently it is at 21.15%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -183.52% is significantly below that of the industry average.
- ISORAY INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Stable earnings per share over the past two years indicate the company has managed its earnings and share float. We anticipate this stability to falter in the coming year and, in turn, the company to deliver lower earnings per share than the prior full year. During the past fiscal year, ISORAY INC continued to lose money by earning -$0.11 versus -$0.12 in the prior year. For the next year, the market is expecting a contraction of 27.3% in earnings (-$0.14 versus -$0.11).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, ISORAY INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The revenue fell significantly faster than the industry average of 42.3%. Since the same quarter one year prior, revenues slightly dropped by 9.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: ISR Ratings Report
At the time of publication, the author held no positions in any of the stocks mentioned. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.