After getting beaten to a pulp again last Friday, mortgage REITs ticked upward on Monday, even as a mass downgrading of the sector�took place by Wunderlich Securities. Though agency players Annaly Capital (NYSE: NLY ) and American Capital Agency (NASDAQ: AGNC ) were able to gain back only a portion of their Friday stock price losses -- as was particularly hard-hit Armour Residential (NYSE: ARR ) �-- the upswing was a welcome, though surprising, outcome.
There was no new information on the jobs picture coming out over the weekend to explain this phenomenon, which makes me wonder: Could bargain hunters be at the heart of the mysterious rally?
Analysts at odds over mREITs
Financial analysts have been busy noting the underperformance of mREITs lately, especially since the Fed dropped the QE3 taper bombshell almost two weeks ago -- immediately igniting fears of rising interest rates, which would decrease the value of the trusts' legacy assets, thus dinging book values. The pain hasn't been limited to the stocks mentioned above,� as CYS Investments (NYSE: CYS ) , and even hybrids like Invesco (NYSE: IVR ) , have been on a roller-coaster ride ever since.
Hot Financial Stocks To Buy For 2014: Polypore International Inc(PPO)
Polypore International, Inc., a technology filtration company, develops, manufactures, and markets specialized microporous membranes used in separation and filtration processes. It operates in two segments, Energy Storage and Separations Media. The Energy Storage segment offers membranes that provide the function of separating the cathode and anode in applications, including lithium-ion batteries that are used in portable electronic devices, energy storage systems, cordless power tools, and electric drive vehicles; and lead-acid batteries used in automobiles, other motor vehicles, forklifts, and uninterruptible power supply systems. The Separations Media segment provides membranes that are used as high technology filtration element in various medical and industrial applications. This segment?s membranes and membrane modules are used in applications, such as hemodialysis, blood oxygenation, plasmapheresis and various high-performance microfiltration, ultrafiltration, and g asification/degasification applications. Polypore International, Inc. sells its products to manufacturers and converters who incorporate its products into their finished goods. The company sells its products and services in North America, South America, Europe, and Asia through its direct sales force, and distributors and agents. The company is headquartered in Charlotte, North Carolina.
Advisors' Opinion:- [By Roberto Pedone]
Another potential earnings short-squeeze trade is global high-technology filtration player Polypore International (PPO), which is set to release its numbers on Wednesday after the market close. Wall Street analysts, on average, expect Polypore International to report revenue of $175.90 million on earnings of 40 cents per share.
The current short interest as a percentage of the float for Polypore International is extremely high at 32.7%. That means that out of the 42.70 million shares in the tradable float, 15.23 million shares are sold short by the bears. If the bulls on Polypore International get the earnings news they're looking for, then this stock could explode higher post-earnings as the bears rush to cover some of their bets.
From a technical perspective, PPO is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending for the last few weeks, with shares moving higher from its low of $36.80 to its recent high of $42.68 a share. During that move, shares of PPO have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of PPO within range of triggering a major breakout trade.
If you're in the bull camp on PPO, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $42.68 to $43.13 a share and then once it clears more resistance at $44.27 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 478,000 shares. If that breakout triggers, then PPO will set up to re-test or possibly take out its next major overhead resistance levels at $48.50 to $55 a share.
I would simply avoid PPO or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below both its 50-day at $39.66 a share and its 200-day at $38.32 a share with high volume. If we get that move, then PPO will set up to re-test or possibly take out its next major support levels at $36.80 to $35.10 a share.
Hot Financial Stocks To Buy For 2014: Lux Dig Pict Inc(LUXD.OB)
Lux Digital Pictures, Inc. engages in the development, production, marketing, and distribution of digital films. The company intends to market its motion picture product and distribution businesses under various brands, including Lux Digital Pictures, Midnight Movies, New Broadway Cinema, and Short Screams. It also intends to develop its brand Midnight Movies brand as a specialty theatrical distributor that provides multi-market releases for some of its own products and film products acquired from third parties. The company?s Short Screams brand would be an online Web portal that streams and broadcasts independently produced short horror, suspense, and fantasy films; and New Broadway Cinema brand would produce and distribute film adaptations of established theatrical stage productions using its proprietary DigiTheater production process. Lux Digital Pictures, Inc. was founded in 2008 and is based in Los Angeles, California.
Best Stocks To Watch Right Now: Groupon Inc (GRPN)
Groupon, Inc. (Groupon) is a local e-commerce marketplace that connects merchants to consumers by offering goods and services at a discount. Each day the Company e-mails its subscribers discounted offers for goods and services that are targeted by location and personal preferences. Consumers also access its deals directly through its Websites and mobile applications. The Company operates in two segments: North America, which represents the United States and Canada; and International, which represents the rest of its global operations. Customers purchase Groupons from the Company and redeem them with its merchants. As of September 30, 2011, the Company featured deals from over 190,000 merchants worldwide across over 190 categories of goods and services. Groupon primarily addresses the worldwide local commerce markets in the leisure, recreation, foodservice and retail sectors. In February 2012, the Company announced the launch of Groupon Thailand. In September 2012, it acquired Savored.
In May 2010, the Company acquired CityDeal Europe GmbH (CityDeal). In August 2010, the Company acquired Qpod.inc (Qpod). In November 2010, the Company acquired Ludic Labs, Inc., a company that designs and develops local marketing services. During the year ended December 31, 2010, the Company acquired Mobly, Inc. In February 2011, the Company launched Deal Channels, which aggregates daily deals from the same category.
The Company distributes a featured daily deal by e-mail on behalf of local merchants to subscribers. It offers daily deals from more than 40 national merchants, including Bath & Body Works, The Body Shop, Hyatt Regency, InterContinental Hotels, Lions Gate, Redbox, Shutterfly and Zipcar across subsets of the North American market. Daily deals that do not appear as a featured daily deal appear as Deals Nearby. Each Deal Nearby is summarized in fewer than 20 words next to the featured daily deal. Deals Nearby often extends beyond the subscriber's closest market or buying preferences.
National merchants also have used the Company�� marketplace as an alternative to traditional marketing and brand advertising. On August 19, 2010, the Company e-mailed and posted a Groupon daily deal offering $50 of apparel at Gap for $25 to 9.2 million subscribers across 85 markets in North America. It sold approximately 433,000 Groupons in 24 hours. Of the consumers who purchased Groupons, approximately 200,000 were new subscribers. As of September 30, 2011, it had 142.9 million subscribers to its daily e-mails.
Groupon NOW is a deal initiated by a merchant on demand and offered instantly to subscribers through mobile devices and its Website. Subsequent to the year ended December 31, 2010, the Company launched Groupon NOW in 25 North American markets. Deal Channels aggregate daily deals from the same category and are accessible through its Website and through e-mail alerts that subscribers sign up to receive. It offers Deal Channels in home and garden and event tickets and travel. Merchants can register their deals to be included in a Deal Channel. Subscribers can use Deal Channels to focus on deals that are of interest to them.
Self-Service Deals allows the Company�� merchants to use a self-service platform to create and launch deals at their discretion. The use of the platform is free and allows merchants to establish a permanent e-commerce presence on Groupon that can be visited and followed by subscribers. The Company receives a portion of the purchase price from deals sold through Self-Service Deals based on the extent to which it marketed the deal. In December 2010, it launched Self-Service Deals in selected North American markets.
Groupon Goods enables consumers to purchase vouchers for products directly from its Website. The Company e-mails deals for Groupon Goods weekly to a targeted subscriber base. The Company offers deals for a variety of product categories, including electronics, home and garden and toys. In September 2011, the Compa! ny launch! ed Groupon Goods in select North American and International markets.
Groupon Rewards enables consumers to unlock special Groupon deals from local merchants through repeat visits. Consumers earn reward points at participating merchants by paying with the credit or debit card they have registered with the Company. Merchants set the amount the consumer must spend to unlock a reward deal, and once a consumer is eligible to unlock a deal, it automatically notifies them. The Company distributes its deals directly through several platforms: a daily e-mail, its Websites, its mobile applications and social networks.
In December 2010, the Company partnered with Redbox to offer a daily deal to their user base and it acquired over 200,000 new customers through that offer and in March 2011, it partnered with eBay to offer a daily deal to their user base and it acquired over 290,000 new customers through that offer. The featured daily deal e-mail contains one headline deal with a full-description of the deal and often contains links to More Great Deals Nearby, all of which are available within a subscriber's market.
Visitors are prompted to register as a subscriber when they first visit its Website and thereafter use the Website as a portal for featured daily deals, Deals Nearby, national deals, and where available, Deal Channels and Self-Service Deals. Consumers also access the Company�� deals through its mobile applications, which are available on the iPhone, Android, Blackberry and Windows mobile operating systems. It launched its first mobile application in March 2010. The Company publishes its daily deals through various social networks and its notifications are adapted to the particular format of each of these social networking platforms.
Groupon competes with Google, Microsoft, Eversave, BuyWithMe and LivingSocial.
Advisors' Opinion:- [By Jonas Elmerraji]
Nearest Resistance: $6.50
Nearest Support: $5.25
Catalyst: Earnings BeatIt's a rare double-digit day for Groupon (GRPN) today -- at least as of this writing -- following an earnings beat for the first quarter of 2013. Groupon has been a perennial underperformer since its IPO in late 2011, and the 76% decline in the stock's price since going public is proof of that. But the 3 cents per share that the firm earned for the quarter bested investors' expectations, and that's all it took to spur a move higher in the stock.
It's a little too early to call today's price action the start of something. From a technical standpoint, today's 10% jump higher isn't particularly important -- shares are still sitting in between resistance at $6.50 and support down at $5.25. And with GRPN's price fading this afternoon, I wouldn't exactly recommend throwing money at this stock right now. Caveat emptor.
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