NEW BULLISH Plays
Tree.com, Inc. - TREE - close: 49.21 change: +1.02
Stop Loss: 47.45
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Entry on January -- at $---.--
Listed on January 08, 2014
Time Frame: 8 to 12 weeks
Average Daily Volume = 147 thousand
New Positions: Yes, see below
Why We Like It:
Do not go to Tree.com if you're looking for deciduous or coniferous trees or any plants for that matter. The deceptive name is part of a new marketing campaign. Tree.com started out as LendingTree.com, which is an online exchange for mortgage loans between consumers and lenders.
According to the company website, "Tree.com, Inc. is the parent of several brands and businesses that provide information, advice, products and services for critical transactions in our customers' lives. Our family of brands includes LendingTreeÂ®, GetSmartÂ®, DegreeTreeÂ®, LendingTreeAutos, DoneRight!Â® and ServiceTree ?. Together, these brands serve as an ally for consumers who are looking to comparison shop for loans, home services, education, auto and other services from multiple businesses and professionals who will compete for their business."
DegreeTree.com helps consumers choose from hundreds of schools. InsuranceTree is a free to consumer service to find insurance. Done Right! is a home improvement professional directory for consumers. LendingTree Autos is designed to help consumers make smarter decisions about their vehicles. Meanwhile HealthTree sounds like a competitor to WebMD but I couldn't get the website to come up.
Earnings appear to be improving and the stock has more than doubled from its 2014 lows. In May 2014 the company raised their full year revenue guidance. They beat earnings estimates on both the top and bottom line last August. In November they beat the EPS estimate and raised their guidance again. That announcement sent the stock soaring (you can see the big rally on November 6th).
After a correction from its post-earnings rally shares of TREE have recovered. Now the stock is breaking out to new all-time highs. The P&F chart is very bullish and forecasting a long-term target above $90.
The stock does have a very small float of less than six million shares. Daily volume is pretty low as well. For that reason I am labeling this a more aggressive, higher-risk trade.
Shares were showing relative strength today with a +2.1% gain and a breakout past recent resistance at $49.00. The $50.00 mark is potential round-number resistance. I am suggesting a trigger to open small bullish positions at $50.10.
Trigger @ $50.10 *small positions*
- Suggested Positions -
Buy TREE stock @ $50.10