Monday, April 23, 2012

Fast growing market

Casino game maker Shuffle Master (SHFL) and women's fashions chain Francesca's Holdings (FRAN) wouldn't seem to have much in common.
But a look at their charts shows that both have found support at their 10-week moving averages and may be forming new bases.
Francesca's broke out past a 24.73 buy point in early March and climbed 37% before retreating to its key support level in low volume, a bullish sign.
The company eventually plans to operate 900 boutiques, more than triple the current figure. Earnings


growth has accelerated from 15% to 17% to 90% over the past two quarters vs. year-ago levels. Sales growth has been consistently strong, ranging from 43% to 88% over the past nine quarters.
Shuffle Master's decline to its 10-week line has also come in light volume. It appears to be forming the first half of a cup-shaped pattern.
Sales growth for the maker of roulette chip sorters and table games has been subpar for many quarters with the exception of last quarter's 28% increase. But profits have been robust recently, rising 55%, 29% and 56% over the past three quarters.
The company plans to buy Ongame Network, one of the world's biggest online poker companies, to tap that fast-growing market.
Both companies are in strong industry groups. Francesca's is in the 50-member Retail-Apparel, Shoes & Accessories group, which was ranked 12th out of 197 as of Friday. It has a Composite Rating of 97, seventh-best in the group.
Shuffle Master's Composite Rating is a best-possible 99, tops in the 37th-ranked Leisure-Gaming/Equipment group.
Shuffle Master also boasts an A+ Accumulation-Distribution Rating and a 1.8 up-down volume ratio, indicating strong demand for the stock. Francesca's has a B Accumulation-Distribution.

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