Concord EFS, Inc. provides electronic transaction authorization, processing, settlement and funds transfer services on nationwide basis. For the FY ended 12/31/00, revenue rose 38% to $1.23B. Net income rose 70% to $187.5M. Revenue reflects increased transaction volumes and the cross-selling settlement processing to several high volume merchants. Earnings also benefitted from lower legal expenses and decreased acquisition related expenses.

May 27, 2001

If you made a retail purchase or an electronic funds transfer within the last week, chances are that Concord EFS, Inc. had a hand in it. CEFT facilitates financial transactions. The company acquires, routes, authorizes, captures, and settles non-cash payment transactions for retailers and financial institutions. The stock has spent almost three months consolidating in the $42-$48 range after gaining 226% from the 3/9/00 intra-day low of $15.31 to the all-time high of $49.93 on March 5th. The stock finally broke out its trading range on Monday and the move was followed up with record highs on Tuesday and Friday. We believe that CEFT could continue to move higher and we are also looking for a split announcement with the July earnings release. The company approved an increase in its authorized shares from 500 million to 750 million at its Annual Meeting on Thursday. CEFT has 243 million shares issued so the company has more than enough shares for a split. The stock is currently trading above historic split range and the company likes to split its stock. Since 1994, CEFT has declared six 3:2 splits when the stock was trading in the $30-$40 range. From a technical standpoint, CEFT has support at Tuesday’s intra-day high of $50.10 with stronger support at $49.48, the 5-dma. Resistance is Friday’s intra-day high of $51 and then possibly $52 or $53. Traders should look for entry points on a bounce off of $50.10 or a breakout above $51 on volume greater than 2 million shares by noon. We plan to set stops at $46 as downside protection.

Picked on May 27th @ $50.60
Change since picked +0.00
Stop Loss @ $46.00

CEFT threw in the towel on Thursday, succumbing to early selling pressure. There was no CEFT specific news to spark this sell off, but weakness in the overall market and bad news out of General Electric probably had a hand in the stock's decline. Good thing that we just raised the stop on CEFT, as we exit this play with a small gain. As we have been saying, hitting singles in this market isn't so bad.

Picked on May 27th @ $50.60
Profit/Loss = +0.90 (+2%) (Stopped out Thursday @ $51.50)
Best Profit = +3.90 (+8%)

June 12, 2001

CEFT continues to display resilience in the face of adversity. On Tuesday, CEFT marched higher, even as the averages plunged into the red. CEFT reached an intraday high of $54.20 before pulling back a bit and finishing at $53.25. We like the way that volume has been building as the stock moves higher. The MACD is also still portending a continuation of the current up trend, so traders might want to initiate positions on a breach of $54 on volume of at least 3.9 million shares for the day. We are raising our stop to $51.50 to protect against a reversal.

Picked on May 27th @ $50.60
Change Since Picked +2.92
Stop Loss @ $51.50

June 10, 2001

CEFT appears as if it has officially launched itself into rally mode. Even though the NASDAQ ended down almost 50 points on Friday, our play managed to close up by $0.28. However, the stock did encounter resistance at $53, so we will keep an eye on this level going forward into next week. Volume was light on Friday's advance, so a retest of the $51.50 level is not out of the question in the near future. Volume becomes important as the stock advances higher. We have not seen a 5 million plus volume day since the first week of May. Traders thinking about opening a new position in CEFT could look to do so on a bounce off $51.50 or a breach of $53.00. Volume on either of these moves should be close to 2 million by midday.

Picked on May 27th @ $50.60
Change Since Picked +2.01
Stop Loss @ $46.00