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 it 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 17, 2000

With all the downgrades and earnings warnings from large institutions like J.P. Morgan (JPM) and Bank of America (BAAC), CEFT just couldn't stand up against the selling pressure. Friday's volume of 4.72 million shares was just more than two times the ADV. Our stop was executed during this recent downdraft. We still believe that CEFT is a solid split candidate. If history repeats itself, CEFT's stock will bounce off the 50-DMA and establish a new high. We will continue to monitor this stock and hopefully we can catch a more advantageous move next time.

Picked on December 10th @ $46.25
Profit/Loss -4.25 (9%) (Stopped on Friday @ $42.00)
Best Profit +0.19 (1%)