Weekly Market Overview

The stock market fell today moving into the new year as investors continue to worry about the U.S. housing market and a credit crunch. The stock market is likely to continue to experience significant volatility as a result that will likely not subside until the middle of 2008 when the mess gets sorted out. Some economists are also concerned about a slowdown in consumer spending and a global credit crunch that could affect the world as a whole.

Top 10 Stocks to Watch this Week

Fundamental Analysis

1. Tyco Electronics (TEL) - After recently spinning off from Tyco this stock is down almost 10%, but is starting to catch the attention of value investors. The company is trading well below its peers with strong cash flows. It is also a victim of the spin-off effect, which has made it an even greater value to opportunistic investors. We believe that this company will outperform in the long-term.
2. Capital Southwest (CSWC) - Activist investor Ned Sherwood came out with an analysis on this company showing a $200/share valuation. The only thing holding shares back are practices by the company that can easily be changed if they so desire. Unfortunately, the company seems resistant to change now, but this is definitely a stock to watch incase they change their mind.
3. United Online (UNTD) - Classmates.com is one of the fastest growing social networking websites on the Internet and this company plans to spin it off real soon. Investors should keep an eye on this development as spin-offs not only represent great investment opportunities, but the social networking space is red hot with names like Facebook and Myspace in the news constantly.
4. Brinks Company (BCO) - Activist hedge funds Pirate Capital and MMI Investments are still fighting the company to unlock value through a divesture of several key businesses. Given the difficult credit market, some are now questioning whether or not this is possible. However, if credit markets improve and they hedge funds are successful during the next annual meeting, this stock could soar.
5. Ceridian Corp. (CEN) - This activist target has agreed to bend to the pressure of the hedge funds and is definitely a company to watch ahead of its annual meeting where it will fight to retain its incumbant board members. If Pershing Square is successful in installing its own board members, we could see significant share appreciation.
   

1. Dryships Incorporated (DRYS) - Intermediate-term bullish symmetrical continuation triangle.
2. Cal-Maine Foods Inc. (CALM) - Intermeidate-term bullish symmetrical continuation triangle.
3. Yamana Gold Incorporated (AUY) - Intermediate-term bullish continuation wedge.
4. Ascent Solar Technologies Incorporated (ASTI) - Intermediate-term bullish symmetrical continuation triangle.
5. Nalco Holding Co. (NLC) - Intermediate-term bullish double bottom.
   

Stock of the Week : Vonage Holdings (VG)

Vonage Holdings Corporation (NYSE:VG) shares rose more than ten percent today after the company announced that it has settled its patent dispute with Nortel Networks without paying any money out of pocket. Investors have been concerned for some time that the VOIP provider may be forced into bankruptcy if it was ordered to pay hefty fines to old-telecom companies that it walked over. Shareholders applauded the move as it marks one of the final lawsuits hovering over the company. (Read More)

Article of the Week : How to Analyze the Retail Industry

Consumer spending is perhaps the most vital aspect of our economy and no industry feels its effects more than the retail industry. The industry is one of the largest in the United States and its growth is largely dependent on the economy as a whole. This article will take a look at how to analyze retailers... (Read More)

Final Words

The market remains optimistic despite questionable yields and other economic data. While this is good news for investors in the short term, be sure to use caution and only invest prudently.