Digging into some of the top-performing ETFs is a great way to find stocks that are moving right now. Since all exchange-traded-funds are designed to mimic the performance of a specific index, Top Equity News looks for clusters of similarly themed ETFs.

For example, if a handful of Biotech based ETFs are leading gainers, then we know where Wall Street’s money is going. Instead of buying a biotech fund, why not own just the stocks responsible for the performance?

When we break out the ETF X-ray machine, we see which companies are pulling the cart and which are in it. Every investment pro knows that you run with the leaders and run away from the laggards. It’s the “L” in William O’Neil’s C-A-N-S-L-I-M.

Yesterday, two software ETFs were top 10 performers.

iShares S&P North Amer Tech-Software (IGV)

SPDR S&P Software & Services ETF (XSW)

The two exchange-traded-funds share eleven names that were up more than 4% yesterday:

• Fortinet Inc. (FTNT): GRADE B
• TIBCO Software Inc. (TIBX): GRADE B
• Ultimate Software Group, Inc. (ULTI): GRADE B
• Taleo Corp. (TLEO): GRADE C
• Ariba Inc. (ARBA): GRADE C
• Concur Technologies, Inc. (CNQR): GRADE C
• NetSuite Inc. (N): GRADE C
• Pegasystems Inc. (PEGA): GRADE C
• TiVo Inc. (TIVO): GRADE C
• Synchronoss Technologies, Inc. (SNCR): GRADE C
• Salesforce.com (CRM): GRADE C

TEN’s favorite chart belongs to Ultimate Software Group, Inc. (ULTI). Shares broke a triple top of $66 on a surge of volume. The upswing resulted in a new 52-week-high. That’s one of the Ns in C-A-N-S-L-I-M. It stands for new, new high, new products, new… and new highs are typically followed by newer higher highs.

While we like the look of ULTI’s chart, we feel its valuations are for momentum chasers only. The software company trades at 66 times forward earnings, nearly 7 times sales, a PEG ratio of 3.8 and a paltry return on equity of 5.31%. Besides projected earnings growth of more than 50% in 2012, there is not much to like here.

Top Equity News rates Ultimate Software Group as only a short-term trading candidate; with a tight stop right below its triple top breakout of $66. In fact, if shares were to close below $64, we would consider flipping ULTI around and shorting it.

ETF X-Ray: ULTI is Ultimately Priced is an article from:

In what was a dismal day – from bell to bell – two biotechnology ETFs managed to climb the avalanche of selling. iShares Nasdaq Biotechnology (IBB) gained 4.78% and SPDR S&P Biotech (XBI) added 2.58% on a day when the three major indexes lost at least 1.86%.

The main catalyst for the performance of both exchange-traded-funds was Pharmasset, Inc. (VRUS). It was up more than 84% after being purchased by Gilead Sciences Inc. (GILD). We congratulate anybody reading this that owned VRUS. TEN is jealous.

Pharmasset was the only biotech stock in the duo’s portfolios to put in a good day’s work. In total, 13 stocks managed to gain 2.5% or more – IBB and XBI share seven of the thirteen. They include:

• Geron Corporation (GERN) GRADE: C
• Regeneron Pharmaceuticals, Inc. (REGN) GRADE: C
• Savient Pharmaceuticals, Inc. (SVNT) GRADE: C
• Spectrum Pharmaceuticals, Inc. (SPPI) GRADE: B
• Ariad Pharmaceuticals Inc. (ARIA) GRADE: C
• Dendreon Corp. (DNDN) GRADE: C
• Amylin Pharmaceuticals, Inc. (AMLN) GRADE: C

One of the metrics Top Equity News reviews closely is money in/out on a weekly basis. Consider it the stock market’s version of a quote attributed to bank robber Willie Sutton. We do it because, “It’s where the money is,” and following the money will lead you to many a winner.

Hands down, Dendreon Corp. (DNDN) won the race with more than $9 million of accumulation. That represents nearly 1% of its market-cap.

DNDN’s stock price has been hammered. Late summer, the price was in the $40s. Now it is $8.36. Maybe, just maybe, Wall Street is about to bring Dendreon back to life. According to our reading of their stock chart, a couple of buy signals have emerged. TEN sees the short-term moving averages reversing course and starting to trend higher. A bullish MACD crossover is another potential indication that more money could pour into the biotech. A few million more dollars and a run to resistance at $12.50 is possible.

Regeneron Pharmaceuticals, Inc. (REGN) is another biotech that benefited from good news. The FDA approved Regeneron’s injectable eye drug Eylea. The company will start selling the drug this week; which was approved as a treatment for “wet” age-related macular degeneration – a common cause of blindness.

The FDA OK pushed shares up 10.42% on Monday and the priced settled the day near a resistance level. If a little profit taking comes REGN’s way, then $53.50ish could be a nice entry point. As recently as the first week of September, the stock was living in the $70s neighborhood. Again, TEN eyeballs a bullish MACD crossover near the indicator’s low point for the year. The last time this signal occurred at nearly the same level, patient investors rode the stock from $47.50 all the up the mountain to $79.90 in about a month.

ETF Trends: Come Trade with Dr. Feelgood is an article from:

Every Tuesday, TEN likes to dig into the holdings of some of the best-performing ETFs. Last week, it was mixed bag at the top of the performance leaderboard; so, we widened our scope to the monthly standings to look for anything eye catching.

Russell 1000 High Momentum ETF (HMTM) is a catchy name. We liked it so much that we peeled back the lid to what is inside.

HMTM is designed to deliver exposure to stocks with high medium-term momentum as determined by a screening and ranking methodology applied to the output of the Axioma U.S. Equity Medium Horizon Fundamental Factor Risk model. Medium-term momentum is a measure of a stock’s past price performance as measured by cumulative return over the last 250 trading days, excluding the last 20 trading days.

This philosophy delivered a 12.71% return during the last month of trading. Thirteen of the exchange fund’s holding outperformed the mother-ship during that timeframe. The names include:

El Paso Corp. (EP) up 26.49% with an Earnings Power Score of 7 out 12. GRADE: C

Cabot Oil & Gas Corporation (COG) up 26.33% with an 8. GRADE: B

Pioneer Natural Resources Co. (PXD) up 23.32% with a 9. GRADE: B

Panera Bread Co. (PNRA) up 22.63% with a 5. GRADE: C

Estee Lauder Companies Inc. (EL) up 17.74% with a 9. GRADE: C

Humana Inc. (HUM) up 16.7% with a 6. GRADE: C

SM Energy Company (SM) up 15.44% with a 9. GRADE: B

Concho Resources, Inc. (CXO) up 15.2% with a 7. GRADE: C

Caterpillar Inc. (CAT) up 14.79% with a 7. GRADE: B

Occidental Petroleum Corporation (OXY) up 14.5% with a 9. GRADE: B

CF Industries Holdings, Inc. (CF) up 13.6% with a 6. GRADE: C

Kansas City Southern (KSU) up 13.07% with an 8. GRADE: B

Apache Corp. (APA) up 12.87% with a 7. GRADE: C

Our grading system works just like a report card: A is the honor roll and Fs are for flunkies. The Earnings Power Score is based on 12 factors that are predictive of future earnings potential – the higher the score the better.

Based on valuations, TEN’s top pick from B graded companies in this group of momentum movers is Caterpillar Inc. (CAT). The Earth mover’s stock trades at a forward P/E of 10.7, while Wall Street expects CAT’s earnings to grow by almost 33%. At the finest higher learning facilities with $50,000 a year tuitions, the profs will teach that a 1 to 1 ratio of P/E to earnings’ growth is acceptable.

The major discount results in a PEG ratio of 0.59. According to a study done by Motley Fool, equities with a score under one tend to outperform the market on a consistent basis. Finally, CAT’s Return on Equity of 35.21% is the sort of ratio that attracts investors like Warren Buffet, and the Investor’s Business Daily reports that all the biggest long-term winners had a ROE of 17% or higher.

Analyzing Caterpillar’s stock chart, its price has bumped up against a multiple top around $97.50. If the heavy machinery company’s shares get ahead of resistance, then it is probably headed to $102.50 to $105. A breakout above the $105 level, and CAT should challenge and potentially surpass its 52 week high of $116.55.

In this volatile market, if CAT’s price drops, $90 would be a great place to jump in. The stock should get strong support there as it peaked near $90 a couple of times on the way up and is the current home of its 26 day-moving-average.

ETF Focus: This Kitty Could Roar Some More is an article from:

Yesterday, we discussed using ETFs to generate trading ideas. Today, we are going to take it to the next step, following sector performance. Many studies have concluded that picking the right sector is equally, if not more important than picking the right stocks.

You know the cliché’ a rising tide lifts all ships; the flip side is that a low tide sinks them too. Making a habit of following sector performance weekly could help investors lock on to more winners early and avoid losers before it is too late.

Every Wednesday, this column will run down the best and worst performing sectors from the previous week. Another feature will be to highlight a few stocks from the winning sectors that might be worthy of your consideration.

Last week, the top three gainers were:

Retail – Wholesale

Industrial Products

Computer & Technology

And the biggest losers:

Conglomerates

Construction

Autos – Trucks & Tires

Understand that other sites might list the performance of sectors/industries in a different order. We try to throw out stocks that can manipulate the true performance of most mainstream companies. Too many low priced securities can be manipulated and skew the numbers.

I don’t necessarily look strictly at performance numbers when examining the stocks within the group to build a target list. Rather, I look at how much of the stock was accumulated dollar wise as a percentage of the shares outstanding. In other words, if company A had an inflow of $20 million with a $100 billion market cap – it’s not as impressive as $10 million versus a $200 million market cap for company B – hope that makes sense.

The 10 stocks that had up volume totaling more than 1% of their market cap from the top- performing sectors include:

Syms Corp. (SYMS)

Netflix, Inc. (NFLX)

DragonWave Inc. (DRWI)

Universal Display Corp. (PANL)

OpenTable, Inc. (OPEN)

Veeco Instruments Inc. (VECO)

Silicon Motion Technology Corp. (SIMO)

WebMD Health Corp. (WBMD)

Aeropostale, Inc. (ARO)

Tekelec (TKLC)

According to my proprietary ranking system, Aeropostale, Inc. (ARO) has the highest grade with a B and Silicon Motion Technology Corp. (SIMO) has the most Earnings Power with a score of 9 on a scale of 11.

Slicing Up Sectors For Stocks is an article from:

Following the money; it’s the best way to catch a crook and to uncover winning stocks. Clues on what stocks are moving now are all around you, all that’s needed is to look in the right places.

Examining the previous week’s winning ETFs can get the hunt for ideas started on the right path. During our review, the first thing that jumps out is that Oil and Energy ETFs claimed 7 of the top 10 performance spots last week.

SPDR S&P Oil & Gas Exploration & Prod (XOP): up 6.1%

PowerShares Dynamic Energy Explor & Prod (PXE): up 4.7%

iShares Dow Jones US Oil & Gas Ex Index (IEO): up 4.7%

First Trust ISE-Revere Natural Gas Idx (FCG): up 4.2%

First Trust Energy AlphaDEX (FXN): up 4.2%

PowerShares Dynamic Oil & Gas Services (PXJ): up 4.2%

PowerShares S&P SmallCap Energy (PSCE): up 3.6%

Once the list of ETFs is developed, the next thing to do is peel back the covers and see which holdings the top ETFs have in common; to identify the stocks pulling the cart. We found 11 companies in at least three of the ETFs on the leaderboard.

They are:

Forest Oil Corp. (FST) in 5 ETFs

Petroleum Development Corporation (PETD) in 4

Plains Exploration & Production Company (PXP) in 4

Tesoro Corporation (TSO) in 4

Berry Petroleum Co. (BRY) in 3

Approach Resources, Inc. (AREX) in 3

Gulfport Energy Corp. (GPOR) in 3

Ultra Petroleum Corp. (UPL) in 3

EOG Resources, Inc. (EOG) in 3

Western Refining Inc. (WNR) in 3

Denbury Resources Inc. (DNR) in 3

Not interested in buying 11 stocks? then iShares Dow Jones US Oil & Gas Ex Index (IEO) – which owns all 11 – and SPDR S&P Oil & Gas Exploration & Prod (XOP) – holds all but Denbury Resources Inc. (DNR) – can handle it all with just one ticket.

Based on our proprietary Earnings Power report card, the best grades go to Petroleum Development Corporation (PETD), Plains Exploration & Production Company (PXP) and EOG Resources, Inc. (EOG);  each earned a B and the rest a C. Our grades are based on a combination of performance factors and 11 profit metrics that have a great track record of picking future winners.

Finally, again using an in-house measuring stick, EOG Resources, Inc. (EOG) had the most accumulation with nearly $66 million flowing into the stock. Forest Oil Corp. (FST) came in 2^nd with $44 million, representing almost 2.5% of the company’s market cap, the largest percentage of any of the 11 on the list.

As you can see, by following the money trail and about an hour of research, we uncovered 7 ETFs and 11 stocks worth your investing consideration. This simple process should help improve your portfolio’s performance. Now you know how to do the work yourself, or you can just come back every Tuesday and find it right here at TopEquityNews.com.

There’s Black Gold in Them There ETFs is an article from: