Icarus Signal New Entries For Today

This story features BENDIGO & ADELAIDE BANK LIMITED. For more info SHARE ANALYSIS: BEN

Daily update on share prices and consensus price targets.

By Rudi Filapek-Vandyck

Owning shares in mining services provider Monadelphous ((MND)) has been a highly profitable treat for investors throughout the first decade of the twentyfirst century. But there is a reason as to why the shares trigger warning signals from Icarus on a regular basis; Monadelphous shares continue to be popular among investors in Australia, most likely spurred on by the well-documented strong performances in the past.

As we've explained quite a number of times now, such popularity feeds into strong interest, which feeds into positive momentum, which in itself attracts even more interest and before we know it we're talking a stretched share price. This is why Monadelphous appears regularly on Icarus' radar.

Past experiences show the shares need elevated investor optimism to continue trading at elevated valuation levels (above consensus target) and since there is a lack of such optimism in today's environment it should surprise no-one that Monadelphous shares have already started correcting after surging above consensus target yesterday.

Maybe a more interesting stock to direct attention towards is Ramsay Healthcare ((RHC)) which equally has been one of the market's star performers since the peak of early November 2007. Ramsay shares are trading around the same price levels as in April, which is rather rare post the August mayhem. But Ramsay shares the same characteristic as Monadelphous with the general public's interest rising on the back of a stellar performance in the past.

Ramsay's share price is around consensus target and it has been above target throughout the month of October. Is a correction finally on the cards? Maybe that's the best long term investors should hope for: a rally for high beta stocks leading to a correction for Ramsay so that finally more shares in the private hospital owner can be purchased at more reasonable price levels.

There are only nine companies left trading in the vicinity but still below target and no less than five of these came in fresh after yesterday's session. Note that Bendigo and Adelaide Bank ((BEN)) received some positive reviews recently (see also Treasure Chest on the website) while Flexigroup ((FLX)) is yet another of the share market's star performers who returns on Icarus radar.

The fact there are more stocks trading above target has more to do with corporate interest and actions. The 25 stocks trading above target include Metcash ((MTS)), AJ Lucas ((AJL)) and Reckon ((RKN)).

Macquarie Telecom ((MAQ)) rejoined the Bottom 50.

Special Note: Due to technical problems today's update does not have any tables.

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