attention investors!

Copyright 2017 Investor's Business Daily Inc.

SMARTSELECT ®COMPOSITE RATING

Rel îAnnual LastQtr NxtQtr Last Qtr MgtEPS Strë îEPS Est ïîEPSï EPSîë Salesîë Pretaxè Own

Rank Company Price íî Rtgì Rtg î%Chgî %Chgî %Chgí %Chgî ROE mrgníë %6

1 NVIDIA CORP (NVDA) Grp 40 o$151.62559.3M Shares 99 Comp. Rating 98 EPS RS 99 ROE 33%

DESIGNS GRAPHIC PROCESSING UNITS USED IN PERSONAL COMPUT-ERS, WORKSTATIONS, GAME CONSOLES AND MOBILE DEVICES.

+44% Ann. EPS Gro PE 50 Avg. D. Vol 20,436,100 Debt 34%Last Qtr Eps +126%6 Prior Qtr +183%5 Last Qtr Sales +48%5 Qtrs EPS ) 15%Eps Due 8/9R&D 21%

Acc/Dis B+Sup/Demand 95

Still in 20% to 25% profit-taking zone; flat for the week.

4 ARISTA NETWORKS INC (ANET) Grp 19 o$151.5844.6M Shares 99 Comp. Rating 98 EPS RS 97 ROE 25%

PROVIDES CLOUD NETWORKING SOFTWARE, HARDWARE FOR INTER-NET, CLOUD AND NEXT-GEN DATA CENTERS.

+55% Ann. EPS Gro PE 43 Avg. Daily Vol 801,500 Debt 4%Last Qtr Eps +37%5 Prior Qtr +30%6 Last Qtr Sales +39%17 Qtrs EPS ) 15%Eps Due 8/2R&D 24%

Acc/Dis A-Sup/Demand 80

Rises 17% past 135.37 3-weeks-tight entry before pullback.

7 PAYCOM SOFTWARE INC (PAYC) Grp 10 o$69.3646.9M Shares 99 Comp. Rating 99 EPS RS 95 ROE 48%

PROVIDES CLOUD-BASED HUMAN CAPITAL MGMT SOFTWARE THATMANAGES EMPLOYMENT LIFE CYCLE FOR EMPLOYERS.



Sells off hard but recoups losses, holds above 10-week.

10 COGNEX CORP (CGNX) Grp 8 o$91.2181.4M Shares 98 Comp. Rating 98 EPS RS 96 ROE 17%

MANUFACTURES MODULAR VISION SYSTEMS THAT ELIMINATE DE-FECTS, VERIFY ASSEMBLIES, AND AUTOMATE PRODUCTION


Acc/Dis D-

Up after several visits to 10-week avg.; can take gains.

13 ALIBABA GROUP (BABA) Grp 7 o$134.871012M Shares 99 Comp. Rating 97 EPS RS 95 ROE 18%

HONG KONG-BASED PROVIDER OF ONLINE AND MOBILE RETAIL MAR-KETPLACES VIA TAOBAO.COM, TMALL.COM AND OTHER SITES.


Acc/Dis D+

Still extended past 3-weeks-tight follow-on entry at 126.50.

2 LUMENTUM HOLDINGS (LITE) Grp 11 o$63.1055.0M Shares 98 Comp. Rating 99 EPS RS 98 ROE 18%

OPTICAL COMMUNICATION AND PHOTONIC PRODUCTS FOR MANU-FACTURING, INSPECTION AND LIFE-SCIENCE APPLICATIONS.

+95% Ann. EPS Gro PE 32 Avg. D. Vol 1,877,800 Debt 0%Last Qtr Eps +53%6 Prior Qtr +73%6 Last Qtr Sales +11%6 Qtrs EPS ) 15%Eps Due 8/9eR&D 16%


Extended from 56.02 entry in cup base.

5 LAM RESEARCH (LRCX) Grp 5 o$148.21159.7M Shares 99 Comp. Rating 99 EPS RS 95 ROE 20%

MANUFACTURES ETCH AND CLEANING SYSTEMS USED IN WAFERFABRICATION EQUIPMENT FOR THE SEMICONDUCTOR INDUSTRY.


Acc/Dis DSup/Demand 85

Bearish reversal sends stock back to 10-week line.

8 STAMPS.COM INC (STMP) Grp 7 o$147.1014.9M Shares 99 Comp. Rating 99 EPS RS 94 ROE 48%

PROVIDES ELECTRONIC POSTAGE AND U.S. POSTAL SERVICES FORINDIVIDUALS AND BUSINESSES VIA STAMPS.COM.



Extended past 5% buy zone; 136.10 cup-base entry.

11 CONTROL4 CORPORATION (CTRL) Grp 32 o$19.3520.7M Shares 99 Comp. Rating 99 EPS RS 98 ROE 16%

DEVELOPS SOFTWARE THAT INTEGRATES MEDIA, LIGHTING, TEMPER-ATURE AND OTHER FUNCTIONALITIES FOR THE CONNECTED HOME.


Acc/Dis A+Sup/Demand 89

Extended after breakout over 12.70; can take gains.

14 COHERENT INC (COHR) Grp 8 o$241.0024.1M Shares 99 Comp. Rating 96 EPS RS 98 ROE 14%

MANUFACTURES LASERS, MEASUREMENT INSTRUMENTS, PRECISIONOPTICS, AND OTHER PHOTONICS-RELATED PRODUCTS

+28% Ann. EPS Gro PE 29 Avg. Daily Vol 326,700 Debt 0%Last Qtr Eps +180%5 Prior Qtr +160%5 Last Qtr Sales+112%4 Qtrs EPS ) 15%Eps Due 7/25R&D 10%

Acc/Dis CSup/Demand 84

Breakout past 260.35 entry in 3-weeks tight pattern fails.

3 TAL EDUCATION GPAADS (TAL) Grp 16 $118.1744.5M Shares 99 Comp. Rating 99 EPS RS 97 ROE 34%

PROVIDES K-12 AFTER-SCHOOL TUTORING TO 2.30 MIL STUDENTSVIA 363 LEARNING CENTERS IN 25 CITIES.

+23% Ann. EPS Gro PE 70 Avg. Daily Vol 750,000 Debt 0%Last Qtr Eps +104%5 Prior Qtr +37%5 Last Qtr Sales +81%2 Qtrs EPS ) 15%Eps Due 7/24

Acc/Dis B-

Hovering around 10-week line; price action getting choppy.

6 NUTRISYSTEM INC (NTRI) Grp 52 o$49.9529.0M Shares 99 Comp. Rating 99 EPS RS 95 ROE 46%

MARKETS WEIGHT LOSS PRODUCTS AND SERVICES VIA THE INTER-NET, PHONE, THE QVC NETWORK AND INDEPENDENT DISTRIBUTORS.

+45% Ann. EPS Gro PE 38 Avg. Daily Vol 665,200 Debt 0%Last Qtr Eps +54%5 Prior Qtr +53%5 Last Qtr Sales +31%5 Qtrs EPS ) 15%Eps Due 7/25

Acc/Dis B-Sup/Demand 92

Still stuck below 10-week line after flashing sell signal.

9 VEEVA SYSTEMS (VEEV) Grp 9 o$59.63107.7M Shares 99 Comp. Rating 99 EPS RS 94 ROE 19%

DEVELOPS CLOUD-BASED SOFTWARE FOR SALES/MARKETING FUNC-TIONS OF COMPANIES IN THE LIFE SCIENCES INDUSTRY.

+47% Ann. EPS Gro PE 74 Avg. D. Vol 1,710,500 Debt 0%Last Qtr Eps +47% Prior Qtr +47%6 Last Qtr Sales +32%12 Qtrs EPS ) 15%Eps Due 8/28R&D 18%

Acc/Dis D+Sup/Demand 82

In profit-taking area from 48.05 entry; pulls back to 10-week.

12 SINA CORP (SINA) Grp 6 $85.9169.5M Shares 99 Comp. Rating 98 EPS RS 95 ROE 4%

CHINESE INTERNET PORTAL OFFERING MEDIA CONTENT AND SERVIC-ES FOR CHINA AND THE GLOBAL CHINESE COMMUNITIES.

+13% Ann. EPS Gro PE 44 Avg. D. Vol 1,690,300 Debt 6%Last Qtr Eps+1350%5 Prior Qtr +80%5 Last Qtr Sales +40%4 Qtrs EPS ) 15%Eps Due 8/7R&D 21%

Acc/Dis C+Sup/Demand 92

Rose 32% past 73.82 entry; watch for test at 10-week avg.

15 AUTOHOME INC CL A (ATHM) Grp 6 o$43.9441.2M Shares 99 Comp. Rating 95 EPS RS 97 ROE 26%

CHINESE PROVIDER OF INDEPENDENT AND INTERACTIVE CONTENTTO AUTOMOBILE BUYERS VIA AUTOHOME.COM.CN/CHE168.COM.



Rallies more than 28% past 36.11 cup entry; can take gains.

1 Nvidia Corp 151.6 99 98 99 +20 +126 +68 +48 33 27 5

Operating costs rising as it invests in AI, self–driving cars.

2 Lumentum Holdings 63.10 98 99 98 +45 +53 –17 +11 18 9 1

Optical and photonic products serve a range of industries.

3 TAL Education ADS 118.2 99 99 97 +23 +104 +16 +81 34 26 44

7Chinese education firms tapping into demand by rural students.

4 Arista Networks Inc 151.6 99 98 97 +19 +37 +28 +39 25 29 28

7Seeing demand from giants such as Microsoft, Alphabet and Amazon.

5 Lam Research 148.2 99 99 95 +57 +137 +68 +64 20 21 0

Seen benefiting as China builds new memory chip fabs.

6 Nutrisystem Inc 49.95 99 99 95 +32 +54 +15 +31 46 10 2

Products include prepackaged meals for breakfast, lunch and dinner.

7 Paycom Software Inc 69.36 99 99 95 +25 +42 –5 +33 48 24 11

7Software firm provides human resources services via cloud.

8 Stamps.com Inc 147.1 99 99 94 –9 +62 –16 +28 48 45 11

Postal services company has been over–delivering on earnings.

9 Veeva Systems 59.63 99 99 94 +13 +47 +33 +32 19 29 1

7Cloud computing company serves top pharmaceuticals, biotechs.

10 Cognex Corp 91.21 98 98 96 +20 +91 +6 +40 17 36 6

Apple is a top customer of this maker of flaw detectors.

11 Control4 Corp 19.35 99 99 98 +11 +200 0 +17 16 10 6

7Its software integrates media, lighting in the connected home.

12 Sina Corp 85.91 99 98 95 +86 +999 +107 +40 4 19 7

It is one of the largest social media companies in China.

13 Alibaba Group 134.9 99 97 95 +32 +37 +26 +50 18 35 13

7Chinese e–commerce company's IPO was largest in history.

14 Coherent Inc 241.0 99 96 98 +160 +180 +218 +112 14 19 1

Its lasers are vital for fiber–optic networking systems.

15 Autohome Inc Cl A 43.94 99 95 97 +13 +15 +4 +16 26 41 19

7Benefiting from growth in China's auto and internet industries.

C O M P A N I E S 1 - 1 5

Record Payment Period Amt. DateDate

INCREASED NewFidelity Nasdaq Com ...... Q .63 6-20 6-22

Two Harbors Invest ........ Q .26 6-30 7-27

WP Carey REIT ................. Q 1.00 6-30 7-14

INITIALFNB Bancorp .................... Q .12 7-31 8-15

REGULARAnnaly Capital Mgmt ..... Q .30 6-30 7-31

Anworth Mortgage ......... Q .15 6-30 7-28

Apollo Founders Adv ...... A .0125 6-30 7-12

Camden Property Tr ....... Q .75 6-30 7-17

Caretrust REIT ................. Q .185 6-30 7-14

Cherry Hill Mgmt ............. Q .49 6-30 7-25

Deltic Timber Corp .......... Q .100 9-5 9-19

Equity Residential .......... Q .50375 6-26 7-14

Global Medical REIT ........ Q .20 6-27 7-10

Interdigital Inc ................ Q .30 7-12 7-26

Invesco Mortage Cap ...... Q .40 6-27 7-26

MGM Growth Propert ...... Q .395 6-30 7-14

Marvell Technology ........ Q .06 7-5 7-21

Monolithic Pwr Sys ......... Q .20 6-30 7-14

National Fuel Gas ............ Q .415 6-30 7-14

Pegasystems Inc ............. Q .03 7-3 7-17

RLJ Lodging Trust ........... Q .33 6-30 7-14

Relm Wireless Corp ....... Q .02 6-30 7-17

SL Green Rlty Corp .......... Q .775 6-30 7-17

Spirit Realty Cap ............ Q .18 6-30 7-14

Steel Dynamics Inc ......... Q .155 6-30 7-7

Sutherland Asset ............. Q .37 6-30 7-31

Tailored Brands .............. Q .18 9-12 9-22

Two Harbors Invest ......... Q .26 6-30 7-27

Washington Trust Bc ...... Q .38 7-3 7-14

G - payable in Canadian funds; Q - Quarterly;A - Annually; S - Semiannually; M - Monthly;U - Pay undetermined; I - Initial; Y - Year-end.

How To Succeed With IBD 50The IBD 50 is a weekly computer-generated watch list of market leadinggrowth stocks. We use earnings, sales plus other basics & priceaction. Don’t buy a stock solely on it being in the list. Scan charts for onesnear buy points, in price bases or at support areas like a 10-week movingaverage. See Investors.com for further research. Be sure to read anarchived story & analyze your stock with IBD’s Stock Checkup.

Ex-dividends continued on B2

Dividends

UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF NEW YORKIN RE CHINA MOBILE GAMES & ENTERTAINMENT GROUP, LTD SECURITIES LITIGATIONThis Document Relates To: All Actions

CASE NO. 1:14-CV-04471 (KMW)

SUMMARY NOTICE OF (I) PENDENCY AND PROPOSED SETTLEMENT; (II) SETTLEMENT FAIRNESS HEARING; AND (III) MOTION FOR AN AWARD OF ATTORNEYS’ FEES AND REIMBURSEMENT OF LITIGATION EXPENSESTO: ALL PERSONS WHO PURCHASED OR OTHERWISE ACQUIRED PUBLICLY TRADED AMERICAN

DEPOSITORY SHARES (“ADS”) OF CHINA MOBILE GAMES & ENTERTAINMENT GROUP LIMITED (“CMGE”) BETWEEN APRIL 26, 2013 AND JANUARY 14, 2015, INCLUSIVE (“CLASS PERIOD”)

PLEASE READ THIS NOTICE CAREFULLY, YOUR RIGHTS WILL BE AFFECTED BY A CLASS ACTION LAWSUIT PENDING IN THIS COURT.

YOU ARE HEREBY NOTIFIED that pursuant to an Order of the United States District Court for the Southern District of New York, a hearing will be held on September 14, 2017, at 2:30 p.m., before the Honorable Kimba M. Wood, United States District Judge, at the United States District Court for the Southern District of New York, Daniel Patrick Moynihan United States Courthouse, Courtroom 18B, 500 Pearl St., New York, NY 10007, for the purpose of determining (1) whether the proposed Settlement of the Action for the sum of One Million Five Hundred Thousand Dollars ($1,500,000.00) in cash should be approved by the Court as fair, reasonable, and adequate, which would result in this Action being dismissed with prejudice against the Released Persons as set forth in the Stipulation and Agreement of Settlement dated May 22, 2017; (2) whether the Plan of Allocation of settlement proceeds is fair, reasonable, and adequate and therefore should be approved; and (3) whether Lead Counsel’s application for an award of attorneys’ fees of no more than 30% of the Settlement Amount and reimbursement of expenses not to exceed $100,000 should be approved.

If you purchased or otherwise acquired CMGE ADS during the Class Period, your rights may be affected by this Action and the Settlement and you may be entitled to share in the Settlement Fund. If you have not received a Postcard Notice of the Settlement, you may contact the Claims Administrator, Strategic Claims Services, at:

China Mobile Games & Entertainment Group Litigationc/o Strategic Claims Services

P.O. Box 230600 N. Jackson Street, Suite 3

Media, PA 19063 Tel: (866) 274-4004Fax: (610) 565-7985

Email: [email protected] can download a copy of the Settlement documents from the website www.strategicclaims.net/cmge,

including: (1) the Postcard Notice; (2) the Notice of (I) Pendency and Proposed Settlement of Class Action; (II) Settlement Fairness Hearing; and (III) Motion for an Award of Attorneys’ Fees and Reimbursement of Litigation Expenses (the “Internet Long Form Notice”); and (3) the Proof of Claim and Release form.

To participate in the Settlement, you must submit a completed Proof of Claim and Release form with the required documents postmarked or emailed no later than October 21, 2017 to the Claims Administrator, estab-lishing that you are entitled to a recovery. You will be bound by any judgment rendered in the Action unless you request to be excluded, in writing, to the Claims Administrator’s address above, mailed and postmarked by August 24, 2017 in the manner set forth in the Internet Long Form Notice.

Any objections to the proposed Settlement, the proposed Plan of Allocation, or Lead Counsel’s motion for

Defendants’ counsel such that they are received no later than August 24, 2017, in accordance with the instruc-tions set forth in the Internet Long Form Notice, which can be downloaded at www.strategicclaims.net/cmge.

Inquiries about the Settlement, other than requests for the Internet Long Form Notice or Proof of Claim and Release form, may be made to Lead Counsel:

GLANCY PRONGAY & MURRAY LLPKara M. Wolke 1925 Century Park East, Suite 2100Los Angeles, CA 90067Tel: (888) 773-9224Email: [email protected]

Further information may also be obtained by directing your inquiry to the Claims Administrator. PLEASE DO NOT CONTACT THE COURT OR THE CLERK’S OFFICE REGARDING THIS NOTICE.

BY ORDER OF THE COURT, UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF NEW YORK

Attention Investors!

5-week, Risk-Free trial, only $9.95

www.VectorVest.com/IBD 1-888-658-7638

3 VectorVest Model Portfolios Double the Performance of the S&P in 2017!

Discover the outstanding performance of VectorVest’s Model Portfolios!

1. , a revolutionary Stop-Price system—free to all VectorVest subscribers.

2. VectorVest combines the power of our Portfolio Genius with exclusive Model Portfolio Trading Templates that clearly tells you: When to Buy, What to Buy and When to Sell.

3. 29 Years of Research and Development has pulled together the intelligence of the

Genius. The 2017 Model Portfolios are so good you have to see it to believe it!

Here are the facts… As of Thursday, 5/25/2017

How did we do it?

Name % Gain/Loss

S&P 500 $2,238.83 $2,415.07 7.9%

INVESTOR'S BUSINESS DAILY WEEK OF JUNE 19, 2017 B 1

Copyright 2017 Investor's Business Daily Inc.

Weekly Stocks On The MoveWeek’s big-volume stocks vs. their 10-week average volume. Stocks $20 ormore & 60,000 avg. volume. Stocks up in price have 70 EPS & RS & availableannual EPS estimate 15%+. Stocks boldfaced are 80 or more EPS & RS.

SMARTSELECT® COMPOSITE RATINGWeek Week Week

Rel Grp Acc 52-Wk Stock Closing Price PE Float Vol Vol%6|EPS| Str |Rtg | Dis | High | Stock Name | Symbol | Price | Chg | Ratio | (mil) | (1000s) | Chg

97 88 89 B– A+ 99.84 Waste Connections o WCN 100.17 +4.63 36 174 8,742 +23677 77 71 C+ B– 99.21 Arch Capital o ACGL 94.43 +1.63 19 114 4,191 +9094 72 88 A+ C 1016.5 Amazon.com o AMZN 987.71 +9.40 186 397 34,568 +8899 99 96 A B– 95.43 Inogen Inc o INGN 92.31 +1.43 92 16 1,458 +6199 98 99 A– B+ 168.5 Nvidia Corp o NVDA 151.62 +2.02 50 559 1,602m +5765 75 71 B C– 63.04 Greif Inc Cl A o GEF 55.91 +1.19 21 25 1,569 +5172 79 81 C B+ 22.42 Investment Tech o ITG 21.65 +0.90 98 32 1,245 +4887 90 91 D+ B+ 75.00 Comerica o CMA 74.12 +1.45 20 173 13,518 +4691 91 93 C– A 71.93 Toro Co o TTC 72.39 +2.10 32 101 3,513 +4099 97 92 A B+ 36.45 Alarm.com Holdings o ALRM 36.46 +1.13 48 24 2,049 +3899 99 82 A+ B– 155.6 Facebook Inc Cl A o FB 150.64 +1.04 38 2.3b 1,159m +3399 99 95 A+ A– 69.65 Paycom Software Inc o PAYC 69.36 +3.80 69 47 3,850 +2987 89 85 C+ A 89.89 Allstate o ALL 89.82 +2.45 16 354 11,390 +2591 79 97 C A 61.84 X P O Logistics Inc o XPO 61.52 +2.31 45 93 8,887 +2399 99 95 B+ B– 57.50 Nutrisystem Inc o NTRI 49.95 +3.95 38 29 4,087 +2395 79 98 B+ A 24.97 Square Inc Cl A o SQ 23.56 +0.53 181 218 48,678 +2299 91 97 A+ B– 83.21 New Orientl Edu&tec o EDU 74.10 +1.63 42 131 8,396 +1998 95 83 A A– 39.17 S S & C Technologies o SSNC 38.33 +1.10 22 167 8,645 +1993 91 75 A– B– 126.3 Fiserv o FISV 124.65 +1.79 27 208 4,639 +1885 89 91 B B– 195.6 Boeing o BA 196.44 +6.41 26 598 16,629 +1797 85 89 A– C+ 215.8 Vail Resorts o MTN 209.21 +7.11 46 38 2,143 +15

91 78 88 A D 129.9 Ansys Inc o ANSS 121.75 –2.77 32 84 21,146 +75896 77 87 A+ C 57.39 Yahoo o YHOO 52.58 –1.44 73 882 6,230m +55188 94 59 B– B 71.85 Pinnacle Fin Ptnr o PNFP 65.60 –3.50 21 47 8,328 +43497 83 96 A B– 153.9 Align Tech o ALGN 145.26 –3.59 60 72 23,124 +35222 58 6 E C 37.97 Kroger o KR 22.29 –8.49 11 894 2,166m +33336 57 24 D B– 39.68 Booz Allen Hamilton Cl A o BAH 31.90 –6.67 18 142 15,799 +22919 56 11 D E 52.18 United Natural Fds o UNFI 35.39 –5.03 14 50 13,447 +22552 70 46 D– B 183.2 Costco Wholesale o COST 167.11 –13.3 30 434 31,336 +19218 53 2 E B– 32.50 Peabody Energy BTU 23.46 –0.97 ... 19 14,762 +17447 70 27 E B 25.98 Sprouts Farmers Market o SFM 21.01 –3.78 24 133 30,647 +16829 61 19 E B– 32.70 Alliance Holdings Lp o AHGP 22.84 –3.92 7 12 1,435 +15434 86 24 D D+ 89.87 Science Applications Int o SAIC 70.99 –6.06 20 42 4,363 +14456 62 35 B C– 44.00 Caesarstone Ltd o CSTE 34.00 –2.70 15 34 2,839 +13416 49 12 D– C 79.33 Target o TGT 52.61 –4.29 11 546 81,752 +1344 10 8 B– E 34.24 Mattel o MAT 20.72 –1.55 24 336 80,331 +125

36 41 51 D– B– 80.48 Wal–Mart o WMT 75.24 –4.18 17 1.4b 88,372 +12299 97 95 A+ D+ 148.3 Alibaba Group o BABA 134.87 –4.57 39 1.0b 1,710m +12251 81 21 A– D– 67.14 Cheesecake Factory o CAKE 52.97 –5.15 18 44 11,765 +12120 60 8 D+ D– 43.20 Semgroup Corp Cl A o SEMG 25.35 –1.70 211 66 8,601 +11299 97 98 A+ B 39.00 Novanta Inc o NOVT 36.15 –0.90 30 31 1,853 +10761 71 72 D B+ 30.73 U S Foods Holding USFD 28.49 –1.31 19 91 17,262 +10640 75 20 D+ E 82.99 EQT Midstream Partners o EQM 69.93 –1.78 14 56 2,596 +10265 96 28 B– D– 60.90 Hawaiian Holdings o HA 46.35 –10.3 9 52 9,128 +10040 71 30 C– D+ 82.19 Viasat o VSAT 67.61 –4.45 55 52 4,302 +10049 54 81 D+ D– 31.70 Jabil Inc o JBL 28.46 –2.58 16 177 18,459 +99

H&R Block Delivers Options Win;Adobe, Red Hat Earnings Up NextBoth software names arebattling for support at50-day moving average

B Y D A V I D S A I T O - C H U N G

INVESTOR’S BUSINESS DAILY

If the stock market goes into a realcorrection, how far should you ex-pect your own stocks to go down?

If your portfolio plays are of thehigh-growth variety, here is a greatrule of thumb, courtesy of decadesof research by IBD: The true mar-ket leaders tend to fall 1-1/2 to 2-1/2times the decline of the major equi-ty indexes.

Is this true today? So far, yes.Year to date, the Nasdaq compos-

ite is the leading index; through Fri-day, the tech-filled index is tradingroughly 3% below its all-time highof 6149. Looking at the top 25 com-panies within the IBD 50, on aver-age these stocks are trading 7.6% offtheir 52-week or all-time peaks.That’s about 2-1/2 times the Nas-daq’s decline.

Withinthe entire IBD 50, the aver-age drop is 7.4%. At least 13 stocks,or more than a quarter of the group,are trading at least 10% off their52-week highs.

A 7.6% decline means that in mostcases, top-performing stockshaven’t really corrected enough inprice for most types of bullish basepatterns to get underway. As notedin the Investor’s Corner (see it on-line at “How To Invest” in Inves-tors.com) and many other marketsarticles, the minimum decline fromhigh to low for a typical cup base is12%. In many cases, the drop is inthe 20%-30% range. Ditto for a dou-ble-bottom base.

Even fora flat base, you would nor-mally expect the stock to fallaround 10% to 15% before bottom-ing out, regaining strong demand,and setting up a potential newbreakout.

Among the top 25 names, the big-gest declines have been in the 11%-12% range. They include China’sTAL EducationTAL, part of a largecontingentof Asia and India compa-nies fortifying the IBD 50’s returnthis year; Lam ResearchLRCX, whichis now testing institutional support

at the 50-day moving average;Veeva SystemsVEEV, which is part ofthe strong medical-software indus-try group; and NutrisystemNTRI,now forming a new base.

CoherentCOHR and Mercado-LibreMELI are also testing their ownrespective 50-day moving averages.

A rebound off the 50-day line, orthe 10-week moving average on aweekly chart, offers a good chanceto add a small amount of shares to awinning position or to establish abrand-new position. But this bullrun is still long in the tooth, and IBDhas noted several heavy days of dis-tribution in recent weeks.

With roughly three to four weeksremaining before the next wave ofquarterly corporate results, a rushof negative outlooks could trigger afurther slide in equities. So could adowngrade in economic growth ei-ther here in the U.S. or abroad. Vola-tility in other financial marketscould spur fund managers to takemore profits in stocks.

In a May 25 news release discuss-ing first-quarter results, Veeva gavea revenue outlook for the currentquarter ending in July of $163 mil-lion-$164 million, above the $157.9million it posted in Q1 and up36%-37%vs. ayearago. Since Q1rev-enue rose 32%, it’s possible to seethe business software firm’s top-line increases accelerating.

I N S I D E T H E 5 0

B Y K E N S H R E V E

INVESTOR’S BUSINESS DAILY

Earnings season has slowed to acrawl, but H&R BlockHRB madeheadlines with a nice earningsbeat and dividend increase.

Adjusted quarterly profitjumped 31% from the year-ago-quarter to $3.76 a share. Sales rose1% to just over $2.3 billion. Thecompany also raised its quarterlydividend by 9% to 24 cents a share.The dividend is payable July 3 toshareholders of record June 23.The dividend increase now givesH&R Block an annualized yield ofaround 3.2%.

H&R Block was a candidate forIBD’s earnings options strategy,which can help mitigate riskaround earnings. Rather than buya stock outright because it’s actingwell ahead of earnings, call op-tions allow you to capitalize on astock’s upside move while mini-mizing downside risk.

Call options are bought with thebelief that a stock is heading high-er. Put options are bearish bets on astock. Stocks trade either weeklyor monthly options. Every contractcomes with a premium and everycontracthas an expiration date.

Keep in mind it’s not mandatoryto buy or sell shares. With success-ful options trades, the put or callbe sold for a profit.

Here’s what a call option tradelooked like for H&R Block in after-noon trading Tuesday.

When shares were tradingaround 26.70, a slightly out-of-the-money monthly call option with a27 strike price (June 16 expira-tion) came with a premium of$1.05, presenting a trade with

3.9% downside risk (1.05/26.70).It was a bit pricey but within the4% range that usually makes sensefor these trades.

One contract gave the holder theright to buy 100 shares of H&RBlock at 27 for $105, excludingcommission.

If H&R Block had gapped downon the news, the most thatcould’ve been lost on the tradewas the amount paid for the con-tract: $105. Shares closed Thurs-day at 30.01, solidly in the money.

Contractelectronics manufactur-er Jabil CircuitJBL was also actingwell before its June 14 earnings re-port.

After a breakout from a flat basein February with a 25.24 buypoint, Jabil quickly formed a three-weeks-tight pattern and broke outagain in mid-March. After that, itstarted to move sideways, gettingsupport at the 10-week moving av-erage along the way.

Just before earnings, whenshares were trading around 30.50,a weekly call option with a 31strike price (June 16 expiration)came with a premium of 90 cents,presenting a trade with 3% down-side risk (0.90/30.50). To buy a lit-tle more time, the June 23 con-tract with the same strike price of-

fered a trade with 3.1% downsiderisk. Shares popped 4% in Wednes-day’s after-hours session butweak-ness in the Nasdaq on Thursdayweighed on the stock. Shares hitan intraday high of 31.30 earlyThursday before reversing inheavy volume.

Here’s a look at some interestingsetups for the current week thatcould present actionable call-op-tion trades:

Tuesday: Homebuilder Len-narLEN reports before the open. It’sbeen trading tightly near the10-week moving average as itflirts with a breakout over a 53.89buy point.

Adobe SystemsADBE, FedExFDX

and Red HatRHT report Tuesdayafter the close. Adobe is gettingsupport at the 10-week moving av-erage after a base breakout in lateJanuary. FedEx is still in buyrange after a breakout from a flatbase with a 201.67 entry. Red Hatis also showing supporting actionat the 10-week line after a break-out from a base in February.

Wednesday: OracleORCL reportsafter the close. When Oracle lastreported earnings, shares soared6% on the news. Sideways move-ment since then has resulted in anew flat base with a 47.09 entry.

Weekly Winners & Losers

Weekly % Company Symbol price change

Nutrisystem NTRI 8.6Paycom Software PAYC 5.8Lennox International LII 5.6TransUnion TRU 4.9Lumentum LITE 4.3SS&C Technologies SSNC 3.0Thor Industries THO 2.7New Oriental Edu EDU 2.2Macom Tech MTSI 1.8Centene CNC 1.5

Ichor ICHR -7.4Cirrus Logic CRUS -7.0YY YY -6.7Lam Research LRCX -6.1MercadoLibre MELI -4.2Applied Materials AMAT -3.6Alibaba Group BABA -3.3Coherent COHR -3.3Veeva Systems VEEV -3.3Cognex CGNX -2.9

Bottom 10

Top 10

Biggest price changes among IBD 50 stocks

%

%

From IBD 50 list as of Thursday market close

Earnings CalendarNotable results expected over the next week

Company SymbolComposite

Rating

Expectednext qtr

EPS % chg IndustryReport

expected

Optionsstrikeprice

Premiumas % to

stock priceDays to

expiration

Read how to trade stocks with less risk ahead of earnings news at investors.com/optionstrategy Sources: IBD, Thomson Reuters, CBOE 6/16/2017

Adobe Systems ADBE 6/20/17 96 33.8 Computer Sftwr-Desktop 138.0 2.4 5Lennar LEN 6/20/17 95 -17.9 Bldg-Resident/Comml 55.0 1.3 33Red Hat RHT 6/20/17 93 6.0 Computer Sftwr-Desktop 88.0 3.2 5FedEx FDX 6/20/17 83 17.6 Transport-Air Freight 212.5 1.8 5Steelcase SCS 6/21/17 46 5.6 Hsehold/Office Furniture 17.5 2.5 33Oracle ORCL 6/21/17 59 -3.7 Computer Sftwr-Database 45.5 1.7 5Winnebago Industries WGO 6/21/17 80 35.8 Bldg-Mobile/Mfg & Rv 29.0 5.4 33CarMax KMX 6/21/17 60 8.9 Retail/Whlsle-Automobile 61.0 3.4 5Carnival CCL 6/22/17 89 -4.1 Leisure-Services 66.0 1.5 5Sonic SONC 6/22/17 70 -2.3 Retail-Restaurants 30.0 2.2 33Accenture ACN 6/22/17 68 7.8 Computer-Tech Services 128.0 1.8 5Commercial Metals CMC 6/22/17 40 -16.1 Metal Proc & Fabrication 19.0 3.7 33Bed Bath & Beyond BBBY 6/22/17 31 -17.5 Retail-Home Furnishings 35.5 3.0 5BlackBerry BBRY 6/23/17 81 n.a. Computer Sftwr-Enterprse 11.0 2.6 5

20222426283032

36

JunMar ’17DecSepJunMar ’16

4 mil12 mil

H&R Block (HRB)

10-weekmovingaverage

SwingTrader Your Next Smart

1.800.648.7285 l www.investors.com/Swing1

UNIQUE APPROACH

SIMPLE STRATEGYALERTS TO KEEP YOU CURRENT

© 2016 Investor’s Business Daily, Inc. Investor’s Business Daily, IBD and CAN SLIM and corresponding logos are registered trademarks owned by Investor’s Business Daily, Inc.

We invite you to takea complimentary two week trial.

Call 1.800.831.2525or go to www.investors.com/LB1

© 2017 Investor’s Business Daily, Inc. Investor’s Business Daily, IBD and CAN SLIM, Leaderboard and corresponding logos are registered trademarks owned by Investor’s Business Daily, Inc.

BY

®

Are LeadersCorrecting,Or Cooling?

E A R N I N G S P R E V I E W

B2 WEEK OF JUNE 19, 2017 INVESTORS.COM

attention investors!

Documents