Idea #5: HANS: Hansen, Leading Energy Drink Maker, Monster brand

Simple Investment Idea #5: HANS (Hansen): Leading Energy Drink Maker ('Monster' brand)

• TICKER: HANS
  
• SECTOR: Consumer Staples, Beverage, Energy Drink, Specialty Drinks
  
• GROWTH THEME: Hansen (HANS) is a specialty drink maker, and their Monster Brand Energy Drink is a leader. Generation Y (a large group) and the Youth, and global growth will help propel stock and industry forward.
  
• DEMOGRAPHICS: Wiley has a study of Energy Drink Demographics.
  
• MARKET CAP: $7.1B
  
• FORWARD PE: 22.73
  
• ESTIMATED 5 YEAR GROWTH: 14.5%
  
• FORWARD YIELD: 0%
  
• PEG+Y GROWTH: 1.56
  
• PERCENT ABOVE 50 DAY MOVING AVERAGE: 4.7%
  
• PERCENT ABOVE 200 DAY MOVING AVERAGE: 29%
  
• RELATED COMPANIES: Pepsi (PEP), Coca Cola (KO), Diageo (DEO)
  
• RELATED BRANDS: Red Bull (Austrian Red Bull GmbH), Rockstar
  

Stock Market S&P 500 in Upper Range of 60 Year Mainstream Price Channel

The S&P 500 (US Stock Market) has been going down for sometime, and the S&P 500 went down 6.7% on August 8, 2011, to 1119.46. From the long term view, where is this market headed?

If we look at the S&P 500 chart from 1950 to 2010 (We made this chart the middle of 2010), we see that the S&P 500 Stock Market is now solidly within the mainstream price channel between the years 1950 and 2010. The peaks in 2000 and 2008 can be considered part of an unsustainable "Bubble" period.



Based on the charts, the current price channel (2011) appears to be somewhere between 500 and 1300 on the S&P 500. Over the long term, the trend still is up, but over many years, the S&P 500 might trade within this mainstream price channel for many years.

Stock Market To Stagnate for Years

In June 2010, we blogged about the US Stock Market stagnating for around five years within a Secular Bear Market. We still hold that view.

Lower Highs, Lower Lows, Violent Rallies in a Secular Bear Market

Since 2008, we appear to be making lower highs (around 1500 in 2008, and around 1370 on the S&P 500 in 2011), and maybe we'll be making lower lows.

If we are in a Secular Bear Market, this does not mean we will be going straight down in a straight line. There will be many tradeable and violent snapback rallies when we least expect it, but these will be Bull Markets within a Secular Bear Market.

Idea #4: SNDA: Profit from Millions of Online Chinese Gamers

Simple Investment Idea #4: SNDA: Profit from Millions of Online Chinese Gamers

• TICKER: SNDA
  
• COMPANY: Shanda Interactive Entertainment LTD.
  
• SECTOR: Technology, Chinese Online Gaming
  
• GROWTH THEME: Online Gaming in China is big business, with millions of players. There is also a great demographic shift in China, and there will be 24 million surplus bachelor marriage aged men, a key Chinese online gaming demographic.
  
• MARKET CAP: $2.79B
  
• FORWARD PE: 23.64
  
• ESTIMATED 5 YEAR GROWTH: 11.09%
  
• FORWARD YIELD: 0%
  
• PEG+Y GROWTH: 2.13
  
• PERCENT ABOVE 50 DAY MOVING AVERAGE: 9%
  
• PERCENT ABOVE 200 DAY MOVING AVERAGE: 18.64%
  
• RELATED COMPANIES: The9 Limited (NCTY), Giant Interactive (GA), Perfect World (PWRD), CDC Corporation (CHINA), NetEase (NTES), Activision Blizzard (ATVI)
  

NOTE: Popular World Of Warcraft MMORPG (Multiplayer Massively Online Role Playing Game) is controlled by Activision Blizzard (ATVI)

Idea #3: QSII: Profit from Digitizing HealthCare Systems

Simple Investment Idea #3: QSII: Profit from Digitizing HealthCare Systems

• TICKER: QSII
• COMPANY: Quality Systems
  
• SECTOR: HealthCare, Technology
  
• GROWTH THEME: There is a big need to modernize and digitize HealthCare Records and HealthCare Information Systems (IT).
  
• MARKET CAP: $2.51B
  
• FORWARD PE: 31.48
  
• ESTIMATED 5 YEAR GROWTH: 18.27%
  
• FORWARD YIELD: 1.70%
  
• PEG+Y GROWTH: 1.57
  
• PERCENT ABOVE 50 DAY MOVING AVERAGE: 8.3%
  
• PERCENT ABOVE 200 DAY MOVING AVERAGE: 30.1%
  
• RELATED COMPANIES: Cerner (CERN), AllScripts Healthcare Solutions (MDRX)
  

Idea #2: TDG: Profit from Aerospace Boom

Simple Investment Idea #2: TDG: Profit From Aerospace Boom.

• TICKER: TDG
• COMPANY: Transdigm Group
  
• SECTOR: Aerospace
  
• GROWTH THEME: We are in the middle of an aerospace boom, including an era where we are replacing both commercial and military aircraft. Transdigm Group provides parts for commercial and military aircraft
  
• MARKET CAP: $4.08B
  
• FORWARD PE: 16.80
  
• ESTIMATED 5 YEAR GROWTH: 10.50%
  
• FORWARD YIELD: 0%
  
• PEG+Y GROWTH: 1.60
  
• PERCENT ABOVE 50 DAY MOVING AVERAGE: 2.78%
  
• PERCENT ABOVE 200 DAY MOVING AVERAGE: 23.4%
  
• RELATED COMPANIES: Boeing (BA), Spirit Aerosystems(SPR)

Idea #1: HMSY: Profit From Government Healthcare Waste

Simple Investment Idea #1: HMSY: Profit From Government Healthcare Waste

• TICKER: HMSY
  
• COMPANY: HMS Holdings
  
• SECTOR: Healthcare, Financial Recovery
  
• GROWTH THEME: If you believe that government is wasteful and will continue to be wasteful especially in areas such as Benefits and Medicaid, then you can profit by investing in HMSY, a company which recovers healthcare government waste.
  
• MARKET CAP: $2.26B
  
• Forward PE: 36.75
  
• Estimated 5 Year Growth: 24.75%
  
• Forward Yield: 0%
  
• PEG+Y Growth: 1.48
  
• Percent Above 50 Day Moving Average: 13.7%
  
• Percent Above 200 Day Moving Average: 30.9%
  

Scary Similarity: Charts 1929-1930, and 2008-2010; Big Drop or Crash Ahead?

There are scary similiarities if you look at the charts today (2008-2010) and the Charts (1929-1930) around the time of the Great Depression.

Here is the current chart from 2008 to 2010 of the S&P 500:



Here is the chart from 1929 to 1930 of the Dow Jones Industrial Average (DJIA)



Comparison Points

On each chart, there are labels. A label on one chart, should correspond (similarity) with the same label on the other chart.

1. 
   A: 2007: S&P 500 peak of around 1560
   A: Sept 1929: Dow Jones Average peak of around 380
   
   
2. B:2008: S&P 500 Drops from 1560 to 1270, -18% drop.
   B:1929: Dow Jones Average Drops from 380 to 325, -14% drop.
   
   
3. C:2008: S&P 500 Intermediate Peak from 1270 to 1440, +13%.
   C:1929: DJIA Intermediate Peak from 325 to 352, +8%.
   
   
4. D:2008: S&P 500 Crashes in short time period.
   D:1929: Dow Jones Average Crashes in short time period.
   
   
5. E:2008: S&P hits intermediate bottom of 741, a drop of 52% from peak of 1560.
   E:1929: Dow Jones Average hits intermediate bottom of 230, a drop of 39% from peak of 380.
   
   
6. F: 2008: S&P 500 Sharp Rebound from 741 to 944, a gain of 27%.
   F: 1929: Dow Jones Average Rebound from 230 to 271, a gain of 18%.
   
   
7. G: 2009: S&P 500 hits Bottom from 1560 to 666, a loss of 57.3%
   G: 1929: Dow Jones Average hits bottom from 380 to 198, a loss of 48%
   
   
8. H: 2009: S&P 500 Rebounds from bottom.
   H: 1929: Dow Jones Industrial Average Rebounds from Bottom.
   
   
9. I: 2009: S&P 500 Pulls back from Rebound.
   I: 1929: DJIA Pulls back from Rebound
   
   
10. J: 2010: S&P 500 Hits "Left Shoulder"
    J: 1930: DJIA Hits "Left Shoulder"
    
    
11. K: 2010: S&P 500 Hits "Head"
    K: 1930: DJIA Hits "Head"
    
    
12. L: 2010: S&P 500 Hits "Right Shoulder"
    L: 1930: DJIA Hits "Right Shoulder"
    
    
13. M: 2010: S&P 500 Hits "Rare Double Right Shoulder"
    M: 1930: DJIA Hits "Rare Double Right Shoulder"
    
    

Rare Double Right Shoulder 2010, and in 1930 Before More Drops

Another similarity involves a rare technical pattern, the Head and Shoulders Top with a Double Right Shoulder.

Two other writers including one from China Daily, and the other from CNBC have written about this.

2010: Double Right Shoulder in Head and Shoulder Pattern



1930: Double Right Shoulder in Head and Shoulder Pattern



Big and Long Drop Ahead?

If the Pattern holds, are we in for a Big and Long Drop Ahead?

In 1930, after the rare Double Right Shoulder in a Head and Shoulders Technical Pattern, the Dow Jones Industrial Average Continues to fall from 275 in 1930 to around 41, July 1932, a drop of 85%.




Of course, just because the charts are similar in both eras does not necessarily mean we will repeat history.

But it does make us think.

Today's S&P 500 Chart