In their Stealthy and Nimble model, Ninja Trades uses a proprietary model to screen stocks that have strong fundamentals and technicals. Ninja Trades takes an opportunistic approach and evaluates potential additions by price to earnings and book ratio as well as enterprise value to EBITDA (earnings before interest, taxes, depreciation, and amortization which is a non-GAAP metric).
The top holding in the model is Warner Chilcott Plc (NASDAQ: WCRX). WCRX is a pharmaceutical company that specializes in women’s healthcare, gastroenterology and dermatology. Their price to earnings ratio is lower than many of their competitors and their earnings per share grew a great deal in 2009—reaching $2.05 compared to the 2008 EPS of -$0.03. Their total liabilities also grew in 2009, reaching $4.1 billion when they were $1.2 billion in 2008. Their second quarter 2010 total liabilities were reported as $3.3 billion. Last week the company sold $750 million dollars in Senior Notes that will be due in 2018.
Another top position in the model is Adtran Inc (NASDAQ: ADTN). According to their website, ADTN provides networking and communications equipment to customers across the globe. Their price to earnings ratio is slightly higher than many others in their sector. Their net revenues and earnings per share dropped in 2009 but showed improvement during quarter two 2010 during which they had increased 24 percent year-over-year while the earnings per share that quarter increased 47 percent from the second quarter of 2009.
The third top position in the model is SanDisk Corp (NASDAQ: SNDK), the manufacturer of a popular line of memory cards and other electronic accessories and tools. The company has a low price to earnings ratio compared to its peers and increased net revenues and earnings per share in 2009. In the second quarter of 2010 they announced a 61 percent year-over-year increase in revenue.
