NEW BEARISH Plays
Belden Inc. - BDC - close: 45.57 change: -1.12
Stop Loss: 48.51
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on October -- at $---.--
Listed on October 01, 2015
Time Frame: Exit prior to earnings (late October or early November)
Average Daily Volume = 394 thousand
New Positions: Yes, see below
Industrial stocks are not have a good year.
Industrial sector ETFs like the XLI and IYJ are both down about -10% to -12% year to date. BDC is in the industrial sector and shares have been crushed. The stock is down -42% for the year and down about -52% from its 2015 highs.
BDC is considered part of the electrical equipment industry.
According to the company, "Belden Inc. delivers a comprehensive product portfolio designed to meet the mission-critical network infrastructure needs of industrial, enterprise and broadcast markets. With innovative solutions targeted at reliable and secure transmission of rapidly growing amounts of data, audio and video needed for today's applications, Belden is at the center of the global transformation to a connected world. Founded in 1902, the company is headquartered in St. Louis and has manufacturing capabilities in North and South America, Europe and Asia."
The company has a history of beating earnings estimates but revenues have been suffering. BDC reported their Q4 results in February this year. Q4 revenues were down -19%. BDC management lowered their revenue guidance.
They reported their Q1 results in late April. They beat the bottom line estimate but revenues missed with revenues falling -12%. Again the company lowered their guidance.
Q2 results were announced on July 29th and earnings beat estimates but revenues were down -3.2% and significantly below expectations. Once again BDC management lowered their guidance. This time they lowered both Q3 and 2015 guidance.
The market was relatively forgiving until the Q1 report on April 30th. Investors had finally had enough and sold BDC on its disappointing results. Shares flat lined for almost two months before breaking down. The stock collapsed on its earnings report in July.
The path of least resistance is down and the next major support level could be the $40.00 area. The point & figure chart is forecasting at $39.00 target. If BDC happens to break $40 then there is no telling where the bottom is. The stock displayed relative weakness today (-2.39%) and looks ready to begin the next leg lower.
Trigger @ $44.85
- Suggested Positions -
Short BDC stock @ $44.85
Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.
Option Format: symbol-year-month-day-call-strike