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The Limited (LTD): Breakout buy
In his Ticker Tape Digest, the technician focuses on stocks that have broken out of basing patterns. He says, "The stock's 12-week, 'W' base is picture perfect. The breakout on the gap move is ideal." "The Limited sells women’s apparel, beauty and personal care products and accessories; annual revenues for the company are $8.6 billion. "Victoria’s Secret operates 1,043 stores in the United States and 322 stores in Canada. The Bath & Body Works operates 1,638 stores in the United States. The firm's retail stores are primarily mall-based. It also sells through its Websites and catalogues. 
"LTD's long-term chart shows the stock peaking at 32 in 2006. The stock was then dragged lower during the bear market sinking to 5.90. It has since rallied back strongly. A 12-month performance chart shows the stock appreciating 120%. "Technically, LTD's stock has broken out from a double-bottom or 'W' base with expanding volume. The move comes as a gap move, which is bullish. "The base was set up after the stock rallied from 11 to a peak of 20. It then formed the W and rallied back to 20 to set up the 'handle' portion of the base. "Analysts expect LTD to post a 41% jump in net for the fiscal fourth quarter ended January 31. They expect net of 96 cents a share, up from 68 cents a year ago. The highest estimate on the Street is at 97 cents a share. "We see good chances for an upside surprise. The past four quarters, LTD topped the consensus estimate by 3 to 5 cents a share. That is impressive. "Net for the fiscal year ending January 2010 should be up 1% to $1.07 a share from $1.05 a year ago. The key is fiscal 2011 ending in January. "Analysts project a 25% gain in net to $1.33 a share from $1.07 a year ago. The stock has price-earnings ratio of 15 based on fiscal 2011 projected net. "Institutional sponsorship is very good. Two key buyers recently. 4-star rated Janus Orion Fund bought 1.2 million shares and 4-star rated BlackRock Basic Value Fund added 2.4 million shares. "We are targeting LTD for a move to 26 within the next few months. A protective stop can be placed near 18.50. We rates LTD a good intermediate-term play for conservative investors." |
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"The Limited Brands (NYSE: