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INVESTools Advisory
A Free Digest of Trusted Investment Advice To unsubscribe from this free newsletter, please see below. In This Issue: 1. Fried Sells 4 Stocks, Gains +46.8% in 3 Months (KM) 2. Rowe: January Index Confirms Bull Market for 2002 (ALOY) 3. Small-Cap Advisor Earns +31.6% in 2001 (LBIX) 4. Compounding Returns with Pine Trees (PCL) 5. Undervalued, High-yield Bank Puts Customers First (ASO) *************** A Word from our Sponsor ******************* Top Wall Street Watcher Ben Zacks: +51.7%/year 5-Year Gain! Moving with the best and brightest of Wall Street's big- money machines earned Ben Zacks a +51.7% five-year average annual gain. Start outperforming long-term. Get Zacks' latest 13-stock buylist with your FREE 30-day trial: http://www.investools.com/c/go/ZAKS/MTXTU-zaksTB1?s=S600 *********************************************************** INVESTools Advisory By John Brobst, INVESTools.com 1. Fried Sells 4 Stocks, Locks in +46.8% in 3 Months (KM) David Fried knows a stock is undervalued when the company's management buys back its shares on the open market. His latest triumph is pocketing an impressive +46.8% gain in three short months by selling four buyback stocks. These include a +43.3% gain on auto retailer Automation Incorporated (AN) and a +62.7% gain on digital phone system purveyor Inter-Tel (INTL). Fried's most recent move is to buy KMart Corporation (KM), the beleaguered discount retailer who just declared bankruptcy. "We do not think that K-Mart will go out of business," Fried says. "It will take a while but recovery is a possibility." He just bought 500 shares for $380. Another Fried pick is C-Cor.net Corporation (CCBL), who provides a range of technology services to broadband networks. Today's telecom spending slowdown hit the company hard; net sales fell 34% to $52 million last quarter and caused a net loss of $5.4 million vs. a $5.8 million gain last year. But Fried cites a buyback plan and a $1.5 million restructuring charge as proof that management sees a rosier future. For more on David Fried's advice see "Buyback Index Portfolios," January 2002, The Buyback Letter. David Fried provides wealth-building opportunities in companies repurchasing their stock. For a free 30-day trial go to: http://www.investools.com/c/go/BACK/MTXTU-back012902 ---------------------------------------------------------- 2. Rowe: January Index Confirms Bull Market for 2002 (ALOY) Don Rowe says the January Index confirms that 2002 should see a bull market. The first five trading days of 2002 provided gains for the Nasdaq (+5.4%), S&P 500 (+1.1%) and Dow Industrials (+1.3%). Rowe says this five-day index has correctly predicted the market's direction for the year since 1951 with only four exceptions. Those include three war years (1966, 1973, 1990) and 1994, when the Fed Funds rate doubled from 3% to 6% for the year. Rowe maintains "be sure to own" recommendations on seven companies he says are leading the market. One of these is Alloy Incorporated (ALOY); the media company and direct marketer provides content, community and commerce to "Generation Y," roughly 58 million people between 10 and 24 years of age. Rowe likes this market as it accounts for $250 billion in disposable income and should grow 20% faster than the overall population. Q3 saw earnings up +119% on a 58% increase in sales. Another Rowe pick is New Century Financial Corporation (NCEN). The financier makes, buys, sells and services sub- prime mortgage loans secured by first mortgages on single- family homes. Borrowers typically have plenty of equity in their properties to secure a loan but suffer from weak credit profiles or high debt-to-income ratios. Q3 earnings grew +238% on a 56% hike in sales. For more on Don Rowe's advice see "Investment Opportunity," February 2002, The Wall Street Digest. Momentum investor Donald Rowe targets stocks and mutual funds capable of generating 26+% annual returns. For a free 30-day trial go to: http://www.investools.com/c/go/WALL/MTXTU-wall012902?s=S600 ----------------------------------------------------------- 3. Small-Cap Advisor Earns +31.6% in 2001 (LBIX) The major indexes suffered a terrible year, but Richard Geist's 12 recommendations for 2001 earned a healthy +31.6%. He lists many reasons why his selections should see growth going forward. These include "extremely bullish" monetary conditions with high productivity and no inflation in sight, and a yield curve that continues to steepen. Also, investor sentiment polls are becoming more bearish. "These are always a contrary indicator," he says. Geist's latest recommendation is to buy shares of Leading Brands (LBIX). The company is Canada's largest independent food brand management company, and it is now expanding into the US. Geist particularly likes how the firm saves money with its integrated distribution system; the system makes products from raw materials and provides packaging, warehousing and distribution. Recent financial results show that Leading Brands is on a roll. FY 2001 saw revenues grow 70% to $49.8 million on net income of $1.2 million ($0.09 per share), up from last year's loss of ($608,000). Geist predicts the company will see revenues reach $40 million in 2002 and $60 million in 2003. That yields a forward PE of 4.3. "We think LBIX is significantly undervalued," Geist says. "In the $1 range, Leading Brands is a strong buy." For more on Richard Geist's advice see "Highlighted Stocks," February 2002, Richard Geist's Strategic Investing. Richard Geist integrates psychological aspects of investing into a methodology for selecting small company stocks. For a free 30-day trial go to: http://www.investools.com/c/go/STIN/MTXTU-stin012902 ---------------------------------------------------------- 4. Compounding Returns with Pine Trees (PCL) Growing trees is not usually a noisy business that catches the attention of the investment media. "But it is a good business," says Dick Young. The timber business is less volatile and capital-intensive than manufacturing, and Young sees demand for timber increasing as the population increases. He notes how the average return on timber investments has outperformed the S&P 500; from 1960 to 1999, the average annual return was 13.6%. Young's favorite timber play is Plum Creek Timber (PCL), one of the largest private timberland owners in the US. The REIT's primary goal is to profit by acquiring and managing lands. Young says Plum Creek Timber's 8% yield and status as a REIT makes it ideal for tax deferred accounts. Another of Young's timber selections is Deltic Timber Corporation (DEL). The company grows and harvests timber from its over 430,000 acres in Arkansas and Louisiana. A main company goal is to expand its timber holdings and sustainable harvest level. Young says shares are a good portfolio counterweight for value investors "who appreciate the intrinsic worth of underlying real natural resources." For more on Dick Young's advice see "Investment Commentary," February 2002, Richard Young's Intelligence Report. Richard Young uses the buy-and-hold strategy of mentor Warren Buffett to uncover low-risk, high-reward opportunities. For a free 30-day trial go to: http://www.investools.com/c/go/INTE/MTXTU-inte012902?s=S602 ---------------------------------------------------------- 5. Undervalued, High-yield Bank Puts Customers First (ASO) Amsouth Bancorp (ASO) is giving investors a healthy yield (4.43%) for the risk involved, says Jodie Weiss (Investment Quality Trends). With $39 billion in assets, Amsouth is one of the largest financial institutions in the south with more than 600 offices. She credits the bank's success to "putting the customer first." Weiss likes how Amsouth uses new technology to save money by streamlining operations. She notes how Amsouth just ranked number six on eWeek's "Fast Track 500" list of companies that deploy cutting-edge technology throughout operations; at number 5, Merrill Lynch was the only financial services firm who placed higher. Also, Amsouth's Internet banking group quadrupled its customer base to 425,000 last year. Weiss says ASO shares are undervalued. With the stock selling near $20 and a yield of 4.43%, Weiss sees "43% upside potential." Dividends have risen annually for the past 11 years, a buyback plan for 25 million shares was authorized in September 2001, and the stock's PE is a reasonable 13x. "When priced to yield 7.0%, ASO is undervalued and a buy should be considered," Weiss says. For more on Jodie Weiss' advice see "Investment Spotlight," January 21, 2002, The Income Digest. The digest excerpts from investment publications and highlights all-weather income-oriented opportunities uncovered by the top minds on Wall Street. For a free 30-day trial go to: http://www.investools.com/c/go/INDI/MTXTU-indi012902 *************** A Word from our Sponsor ******************* NEW REPORT: Top 10 Picks for 2002 (+36% in 2001!) Despite a slumping economy and shaky stock market, Frank Curzio's 10 Bulls-eye Picks for 2001 gained a whopping 36%. Now Curzio has selected 10 stocks with incredible potential for 2002. Get these 10 red-hot picks today! Click here: http://www.investools.com/c/go/FXCP/FXCP-mtxtu0129?s=S200 *********************************************************** Disclaimer The INVESTools Advisory is published solely for informational purposes and does not solicit nor offer to buy or sell any stock, mutual fund or other security. It does not attempt or claim to be a complete description of the securities, markets, or developments referred to in the material. All expressions of opinion are subject to change without notice. The information is obtained from internal and external sources which INVESTools considers reliable, but INVESTools has not independently verified such information and INVESTools does not guarantee that it is accurate or complete. INVESTools does not undertake to advise anyone. INVESTools, its employees, and/or officers and directors, may from time to time have a position in the securities mentioned and may sell or buy such securities. 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