For his final "Executive Decision" segment of Wednesday's Mad Money program, Jim Cramer sat down with Melissa Smith, chairwoman and CEO of Wex Inc. (WEX) , the fleet service company with a stock that's off 12% from its highs last week.
Smith said Wex has grown a lot since her last visit to the set. The company has made two acquisitions. She said while Wex's fleet business accounts for 60% of revenues, only a small fraction of that comes from trucking. The rest comes from the many small and medium-size businesses and governments that have fleets of vehicles. They make money by taking a small percentage of what's spent at gas stations, but are also expanding into other travel-related expenses as well.
In this daily bar chart of WEX, below, we can see some "interesting" gyrations. Prices rallied from early November to late February and then quickly reversed to the downside with a gap to the downside, a close below the 50-day moving average line and a test of the 200-day moving average line.
This all happened in a few days with trading volume that was heavier than it was in December. The daily On-Balance-Volume (OBV) line has begun to weaken and the Moving Average Convergence Divergence (MACD) oscillator is in a bearish configuration but still above the zero line.
In this weekly bar chart of WEX, below, we can see how prices have performed the past three years. Investors are probably happy with the returns but we need to focus on the future. Prices are testing the rising 40-week moving average line.
The weekly OBV line shows a peak in January and the MACD oscillator is close to crossing to the downside for another take profits sell signal.
In this Point and Figure chart of WEX, below, we can see that the program behind the charting software is projecting a potential downside price target in the $177 area.
Bottom line strategy: Companies can have a great sounding story but you don't know when it has been fully discounted or shifting. The best and most up to date information is price. The price of WEX is looking vulnerable to further weakness.