Weekly Market Overview

U.S. stocks plummeted this week after Countrywide Financial denied bankruptcy speculation and AT&T announced softness in its broadband and phone line business, pushing the Nasdaq Composite into an eighth day of losses. Meanwhile, the financials continued to weigh down the NYSE as the largest mortgage originator in the country continues to trade like it's going out of business. In the end, it is still an uncertain market with no real direction from economic indicators. But for now, people are assuming the worst...

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. Entergy Corporation (ETR) - Intermediate-term bullish upside breakout.
2. China 3c Group (CHCG) - Intermediate-term bullish bottom triangle.
3. King Pharmaceuticals Inc. (KG) - Intermediate-term bullish double bottom.
4. Gilead Sciences (GILD) - Intermediate-term bullish continuation diamond.
5. Sepracor (SEPR) - Intermediate-term bullish head and shoulders bottom.
   

Stock of the Week : Vonage Holdings (VG)

E*Trade Financial (NYSE:ETFC) is set to make several changes as a part of its broad restructuring plan. The brokerage announced that it will close its institutional trading business and sell its $3 billion asset-backed security portfolio. E*Trade also appointed a former Wachovia official and mortgage industry veteran Robert Burton as chief operating officer of its banking segment. Shareholders are hoping that these and other changes will help change the fortunes in the troubled brokerage. (Read More)

Article of the Week : Recession-Proof Your Portfolio

There’s a lot of talk about a recession these days from both politicians and economists, making many investors very nervous about the future. Recession is defined as two consecutive quarters of negative gross domestic product (GDP) growth. Currently, there is no consensus on whether we are in a recession, going into a recession, or simply in a bad market, but it never hurts to learn how to protect your stock portfolio. (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.