Concord EFS, Inc. provides electronic transaction authorization, processing, settlement and funds transfer services on nationwide basis. For the 9 months ended 9/00, revenue rose 41% to $876.1M. Net income rose 90% to $128.4M. Revenue reflects the addition of new merchants, the acceptance of e-payment cards and increased transactional volumes. Earnings also benefitted from lower acquisition expenses and restructuring charges.

December 10, 2000

Concord EFS is a leading provider of the many services required for successful electronic transactions. The height of the holiday retail-spending spree is upon us. Concord EFS could be a solid momentum/seasonal play. On Monday, Lehman Brothers issued some positive comments about the company and pointed out the stock's insularity in the face of market turmoil. We concur that CEFT possesses a very strong chart that reveals an upward sloping trend going all the way back to early August. Some of the chart's luster was tarnished two weeks ago when the stock hit a patch of selling. This pullback was not all bad because it established fantastic support at the 50-DMA and provided the stock with a breather to digest earlier gains. These base patterns are often launching pads to higher prices. Currently, the 50-DMA is at $40.16 and it should provide excellent long-term support. There is good shorter-term support provided by the 10-DMA at $43.50. CEFT notched a new high of $47.13 on Friday and this price should provide slight resistance. The MACD turned positive and issued a buy signal on Friday. Money Flow and OBV are among the strongest in the market, as investment dollars are being put to work in a diminishing pool of stocks that are strong. The fact that the RSI is below overbought levels means that there is room to the upside. CEFT is at a price that historically has resulted in a split announcement.

Picked on December 10th @ $46.25
Change since picked +0.00
Stop Loss @ $42.00

December 14, 2000

CEFT broke below its short-term uptrend line (we indicated that this support was at $44.00 in Tuesday update) and came dangerously close to our stop at $42.00. We are encouraged by the fact that the stock suffered a similar drop two weeks ago and bounced strongly off the 50-DMA and established a new high. As a leading provider of electronic transaction services, CEFT should do well during this peak retail season. Unfortunately, sales have been disappointing so far this year and this fact may have caused the pause in CEFT's march into new high ground. Today's high of $45.25 should provide light resistance followed by the all time high of $47.13. Even if we are stopped, we still think that CEFT could find good support at the 50-DMA of $41.00. Unfortunately, the MACD turned negative today. However, OBV and Money Flow are still strong, which bodes well for the longer term.

Picked on December 10th @ $46.25
Change since picked -2.50
Stop Loss @ $42.00

December 12, 2000

Concord EFS, a leader in providing electronic transaction authorization and funds transfer services has been enjoying a holiday rally. This is obviously the peak season of activity for the company, as credit cards slip from wallets faster this time of year than a sumo wrestler polishes off a bowl of rice. The stock is up just over 50% since late August. If you ignore the quick test of the 50-DMA two weeks ago, you can see that CEFT is holding right at its uptrend line at $44.00. The all time high of $47.13 is the resistance. Today's small decline occurred on light volume of 1.32 million shares, which is more than a million shares lighter than average. This is a good sign that there was very little conviction for the small amount of profit taking. The MACD recently turned positive and we think this may indicate that the longer-term trend may be extended. The RSI has plenty of room before the stock will be considered overbought. OBV and Money Flow are both maintaining solid up trends. We further believe that CEFT is a strong split candidate at these price levels. Past splits have occurred during BoD meetings. There currently are not any meetings pending, but we will keep looking for an announcement. We will exit this position if a split is announced.

Picked on December 10th @ $46.25
Change since picked -1.06
Stop Loss @ $42.00