Monday, November 29, 2010

Trace Your Profits To Ancestry.com?

Ancestry.com
Will Investors Be Able To Trace Their Profits to Ancestry.com? By Investors Business Daily Using the CanSlim Investing Method


First, after looking at the DJIA, S&P500 and Nasdaq index charts, technically I see the markets with some major upside resistance now, and looking to head lower. Now on a fundamental sentiment basis if the good news spin doctors can keep the good times music playing and the crowd dancing to the tunes, possibly the market could head higher here. On the other hand with the dollar gaining some strength lately, maybe stocks are headed lower? Chance favors the prepared mind, so pay attention so you can profit on the upside or downside, and so you don't be a pig and get slaughtered.

Today we're going to look at Ancestry.com (ACOM). You may have seen the firm's advertisements on TV.

The company runs the world's largest online family history resource site. It's digitized a huge number of historical documents over the years and also has other resources to help users research their family tree.

Earlier this year it worked with NBC on the TV show "Who Do You Think You Are?" The show traces the genealogy of various celebrities. And this summer NBC renewed the series for a second year.

Sales growth accelerated during the past four quarters.

Earnings growth also picked up, hitting 167% last quarter.

For the full year, analysts see earnings rising 50% in 2010 and 33% in 2011.

But its earnings have been up and down over the years. The Earnings Stability Factor rating gauges how consistent a company's earnings have been during the past three to five years. It runs from 1 to 99 and the lower the rating the more stable the company's earnings track record. Ancestry.com's Stability Factor Rating is 72, so its earnings have been rather volatile over the years.

Return on equity is a little light at 8%. Historically studies have shown that many winning stocks had ROEs of 17% or higher before they made their big price runs.

The number of mutual funds owning the stock has been climbing, so there is some interest from big investors.

Ancestry Chart Analysis

Ancestry.com

We can see on this weekly chart it just came public in late 2009, so it's a relatively young stock.

It formed a base between August and September (Point 1). That pattern was part of a larger base-on-base pattern (Point 2).

The stock broke out of that cup-shaped base (Point 3) and hit a series of new highs.

In recent weeks it's pulled back near its 10-week moving average line, where it seems to be finding support and has started to climb (Point 4).

Since Thursday is Thanksgiving, the next Daily Stock Analysis will be posted on Monday, November 29. So be sure to watch for it.

Ancestry.com Stock Checkup

Ancestry.com's 98 Composite Rating is the best among the 34 stocks in its Internet-Content industry group.

Its 94 EPS Rating is the fourth highest in the group.

Its 96 Relative Strength Rating is the group's second highest.

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