Setting The Table – 2-24-13 – QIHU, AWAY, AMCX

Homeaway Inc (AWAY)

As has been the case recently, most of the stocks on my lists are still well extended, so there aren’t a whole lot of interesting setups to pick from. Here are the three that stood out to me:

Qihoo 360 Tech Ads (QIHU)

QIHU is currently extended from the first stage cup with handle base that it broke out of at the end of November. The way it has been trading the past few weeks could be the formation of a potential second stage flat base. The stock suffered heavy distribution following its first stage base breakout, but since that week it has seen four weeks of accumulation compared to only one week of distribution. It has spent the past four weeks consolidating on light volume.

In its past three quarters, QIHU has posted earnings growth of 320%, 55% and 25% as well as sales growth of 202%, 107% and 77%. While these growth number are tremendous, the slowing of the growth could be worrisome. Annual earnings for 2012 are projected to be up 49% and then increase another 42% in 2013. QIHU is schedule to report earnings on March 5. The stock has seen up and down fund ownership over the past year and is in a struggling industry group, but it does sport a 34% return on equity.

Homeaway Inc (AWAY)

AWAY is a young stock that works with online vacation rentals. The stock broke out of a first stage cup this week, jumping 15.7% on volume that was 182% above average. It is currently sitting in buy range right above the pivot point. Since forming the base, AWAY has logged four weeks of accumulation against three weeks of distribution.

In its most recent quarter, AWAY reported earnings growth of 100% and sales growth of 22%. This huge jump in earnings growth is the driving force behind this week’s breakout. The company is projecting annual earnings growth of 33% for 2013 and 23% for 2014. It has shown a strong increase in fund ownership this year, but is in a poorly performing industry group.

Amc Networks Inc (AMCX)

AMCX, which operates cable television channels, just completed the fifth week of a first stage flat base with a pivot point of 61.32. In the past eight weeks, the stock has seen six weeks of accumulation. The current flat base is the fourth in a series of base on base patterns the stock has formed since coming public in June of 2011. AMCX is scheduled to report earnings this week.

In its most recent quarter, AMCX reported earnings growth of -9% and sales growth of 17%. These numbers are a far cry from the growth numbers we prefer to see. Despite the fact that the most recent quarter numbers were weak, AMCX did report earnings growth of 46% and 54% in the two quarters before the most recent one. Annual earnings are projected to increase 34% in 2012 and another 33% in 2013. The company has increased fund ownership in the past year and is in a very strong industry group.