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People Corp. a case of buy high and sell higher Add to ...

Hi Lou,

Your article on People Corp. (PEO) is the only one in existence.

Is the people space (pension, benefits, HR consulting) a good place to be investing? Lots of little players without a real national presence for what Goldberg (CEO) is attempting? Seems like he’s going after the best companies being led by owners that are trying to figure out how to sell and head into retirement. Goldberg may be offering semi-retirement with a consulting or a mentoring role instead of full-out retirement.

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Anyways…feels like the early days of the mutual fund era. Management looks strong, great past success in consolidating acquisitions, and a strategy that seems to be working. I’m in at $1.70 per share, sitting pretty and going after the future dividend.

Thanks,

Joe

Hey Joe,

Thanks for the assignment and your thoughts regarding People Corporation.

This will be the second time that I probe the charts for the stock. The first was on Aug. 26, 2013, when the shares were trading for $1.23. The shares had moved up from a low of $0.39 in December of 2012 and caught another leg up in April of 2013 on the announcement of an acquisition. In the last analysis it was mentioned that the shares were building a base near $1.15. It was advised to be cautious with these shares based on a number of risk factors including very small market capitalization, a higher risk trading environment, sparse coverage by the street, and thin liquidity. The shares continued to build a base near $1.25 into January of 2014 where they began another advance.

You mentioned the loneliness of the individual investor. I can relate to your plight. However if you check out the bull boards for PEO you’ll find that there is a community that follows the stock which might help you get some feedback on your thoughts.

Another inspection of the charts will form the basis of the evaluation of this stock.

The three-year chart reveals the riser-step pattern that has evolved over the course of the move higher. What I like about this is that the stock builds support as it climbs. If a retreat were to ensue there would be multiple ledges of support that could prevent a free fall. Make note of the support that has been provided by the 50-day moving average since January of 2013. In addition the uptrend line has remained intact as the stock has moved higher and there has been a series of higher highs and higher lows which would be interpreted as positive.

The six-month chart indicates that the shares are pulling back from resistance near $3.00 as the MACD and the RSI turned lower. PEO has been improving its case as an investment with an increase in its market capitalization, and improved average volume. What I would like to see is a move to the senior board and some analyst coverage to further enhance the opportunity. The company will report third-quarter results in July which you need to put on your calendar.

PEO exhibits an intact uptrend line, a riser and step advance, and support along the 50-day moving average. These patterns would indicate that you shouldn’t shoot this running horse.

Make it a profitable day and happy capitalism!

Have your own question for Lou? Send it in to lou@happycapitalism.com.

 
Security Price Change
PEO-X People Corp. 2.61 0.01
0.385 %
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