Trade of the Day: NICE Stock Could Make Traders Very Happy

Advertisement

Nice-Systems Ltd (ADR) (NASDAQ:NICE) — This Israeli software company specializes in telephone voice recording, data security and surveillance systems used to improve customer experience and business results, ensure compliance, stop financial crimes and provide safeguards.

According to S&P Capital IQ, recent needs for cloud-based protection have resulted in healthy bookings gains. And increased regulatory compliance requirements and heightened fraud activity detection needs, along with terrorism risks, support continued demand for the company’s products. Its analysts do note that political instability in the Middle East presents potential risks.

On Feb. 5, Nice-Systems reported record revenues of $294 million for the fourth quarter and diluted earnings of $1.02 per share, easily beating Wall Street’s estimates of $0.94.

The next day, Capital IQ upgraded its opinion of NICE stock to “buy” from “hold” and raised its 12-month target price to $78 from $50 based on a revised P/E-to-growth analysis. Its analysts increased their 2015 EPS estimate to $3.14, up from $2.96, and set a forecast of $3.47 for 2016. Technically, NICE stock is in a powerful bull channel that began in November. It broke through the top of the channel on Feb. 18, after S&P Capital IQ added the stock to its small/mid-cap portfolio.

Initial support now rests at the channel’s top, but volume is declining and so is the MACD indicator. Thus, despite the breakout, NICE stock could pull back to the secondary support line and 20-day moving average at about $55.

Buy NICE stock at $55 or lower with a trading target of $65 for a gain of 18%. Investors who add this stock to their portfolio as a long-term holding could see much higher returns. The company pays a nice dividend of $0.64 per share for a forward annual yield of 1.1%.

NICE Stock Chart
Click to Enlarge

Chart Key


Article printed from InvestorPlace Media, https://investorplace.com/2015/03/nice-systems-ltd-adr-nice-stock-trade-day/.

©2024 InvestorPlace Media, LLC