Tuesday, July 13, 2010

What a Wells Letter Looks Like

Some companies have the unfortunate problem of getting a Wells Letter from the SEC. Plaintiff lawyers circle and sue the company on behalf of shareholders. A Wells Letter is kind of like the SEC getting in your kitchen and turning over all the pots and pans.  This is nasty business for the publicly traded company. Using AlphaVision™ for Bloomberg the Wells Letter impact looks like this.

7-13-2010 1-33-11 PM The stock flagged in the View above, Amedisys Corp, (AMED) received a Wells Letter a couple of weeks ago. In this landscape, taller buildings are down the most consecutive days in a row. AMED stands out among the top 3000 or so names I follow in AlphaVision™, being down the most over 8 consecutive days. The green color indicates higher 5 day average of daily value traded (1.29x the 3 month average). Money is leaving AMED in buckets in a market with relatively light volume. Something to think about before you do some Bottom Fishing.

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