Weekly Market Overview

The U.S. stock markets continued to exhibit volatility today as investors sorted through a range of reports on how companies are handling a slumping economy and tightened credit markets. The top story was Elliot Spitzer's ironic admission to participating in a prostitution ring that may end in his resignation. Meanwhile, rumors about liquidity concerns at Bear Stearns caused a sell-off that continued throughout the day despite the fact that it was proven false. Financials led the decline amid concerns about margin calls at brokerages while McDonald's announced some positive news for restaurants and retailers with rapid same-store growth. In the end, the future of the economy is still uncertain and leading to substantial volatility that will likely continue.

Top 10 Stocks to Watch this Week

Fundamental Analysis

1. Select Comfort (SCSS) - Shareholders have definitely been losing sleep over this stock, which has declined nearly 80% during the past 52 weeks. This prompted activist hedge fund Clinton Group to suggest several changes aimed to turning the company around and restoring profitability. (Read More)
   
2. Wal-Mart Stores (WMT) - Wal-Mart may not be the latest hot pharmaceutical company, but it does have solid earnings that appear to be improving. The company reported posted strong quarterly numbers that an more and more customers are looking for bargains. (Read More)
3. Kraft Foods (KFT) - Warren Buffett was a buyer of this company back when it was trading 5% higher. Now, investors have the chance to invest alongside the legendary investor at an even lower price! This company is cheap by all standards and ready for a turnaround. (Read More)
4. Spanish Broadcasting Systems (SBSA) - Activist shareholders are pressuring this small company to unlock value through a sale, suggesting that it could obtain a price more than 100% higher than where it's trading now. Apparently, the company has many interested suitors but a stubborn management. (Read More)
5. Yahoo (YHOO) - Yahoo is continuing to play hard to get as it attempts to ward off an acquisition by cash-heavy Microsoft. The company continues to insist that it the current offer substantially undervalues the company given its international holdings in high-growth Asian markets. (Read More)
   

Technical Analysis

1. BMC Software (BMC) - Intermediate-term bullish symmetrical continuation triangle.
2. Casella Waste Systems (CWST) - Intermediate-term bullish continuation wedge.
3. Suntech Power Holdings Corporation (STP) - Intermediate-term bullish continuation wedge.
4. Amphenol Corporation (APH) - Intermediate-term bullish continuation wedge.
5. Altria Group (MO) - Intermediate-term bullish continuation diamond.
   

Stock of the Week : Countrywide Financial (CFC)

Countrywide Financial Corp (NYSE: CFC) shares are down significantly on reports it is being investigated by the Federal Bureau of Investigation for securities fraud, specifically whether it didn’t disclose its true financial condition and the poor quality of its mortgage loans in required regulatory filings. This new FBI investigation is in addition to SEC and Congressional probes already looking into the company. (Read More)

Article of the Week : Has the Fed Lost Control?

The Federal Reserve is set to cut interest rates yet again after recent reports suggested that the economy significantly worsened. The move comes conveniently after a weaker than expected employment report that essentially put the nail in the coffin for the US economy. (Read More)

Final Words

The future of the U.S. economy remains uncertain with more problems in the financial markets. Meanwhile, some pressure is being relieved with an increase in consumer spending and strong earnings by Wal-Mart and McDonald's. In the end, the only thing certain at this point is more volatility as investors sort out the good from the bad.

Weekly Market Overview

US. stocks sank more than 300 points early this week amid bleak corporate forecasts led by the financial sector. Many economists are also concerned that the Federal Reserve may be acting too strongly to lower interest rates at the expense of the declining U.S. dollar and consumer. Federal Reserve officials also warned that more home foreclosures were coming leading to more bank write-downs despite sound cash levels. All in all, the soft economy and weak consumer spending is creating a difficult profit environment for most firms while investors are quick to sell given the bleak outlook. On a positive note, this could mean that there are many deals to be had in today's market!

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. The 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 Corporation (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.
   

Technical Analysis

1. Arthrocare Corporation (ARTC) - Intermediate-term bullish head and shoulders bottom.
2. Bunge Limited (BG) - Long-term bullish continuation diamond.
3. Harmony Gold Mining Company (HMY) - Long-term bullish megaphone bottom.
4. Viropharma Incorporated (VPHM) - Intermediate-term bullish bottom triangle.
5. Omnivision Technologies (OVTI) - Intermediate-term bullish double bottom.
   

Stock of the Week : Ackman Vs. Whitman (MBI)

Bond insurer MBIA, Inc. (NYSE: MBI) seem to be dropping like rocks, but that isn’t deterring respected value investor Martin Whitman’s Third Avenue Funds from increasing its stake in the company. The move pits him directly against the famous activist investor Bill Ackman’s Pershing Square, which has taken an aggressive short position in the bond insurers and sees imminent bankruptcy. So, where should you place your bets? (Read More)

Article of the Week : Short Selling for the Average Investor

Short selling has traditionally been a technique reserved for the expert traders and investors, but a new set of ETFs released by ProShares may quickly change the landscape. Now, average investors can do more than just sit on the sidelines in a bear market – they can “safely” purchase ETFs that will enable them to profit from declines in the marketplace without being forced to open a margin account. (Read More)

Final Words

The market remains depressed and investors should be careful when investing in these climates. It is best to keep in stocks with international exposure and no credit risk.

Weekly Market Overview

U.S. stocks trended down this week as growing concerns about the housing market and consumer spending sparked renewed worries about stagflation. A series of poor jobs reports, declining interest rates, a rise in oil prices, increasing credit card delinquencies, and deepening troubles in the housing market all strongly point to this direction. The Federal Reserve insists that these rate cuts are necessary in order to boost the economy, which it deems more important than the consumer. The result is a bet that the economy will turn around at the cost of skyrocketing consumer prices - a theory that, if wrong, could spark the feared stagflation and send the economy into new lulls. In the end, these negative concerns about the future combined with positive interest rate activity is making this market extremely volatile.

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. The 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 Corporation (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.
   

Technical Analysis

1. Barrick Gold Corporation (ABX) - Intermediate-Term Bullish Continuation Diamond.
2. Central European Distribution Corporation (CEDC) - Intermediate-Term Bullish Symmetrical Continuation Triangle.
3. Omnivision Technologies  Incorporated (OVTI) - Intermediate-Term Bullish Head and Shoulders Bottom.
4. Petroleo Brasileiro Sa Petrobras (PBRA) - Intermediate-Term Bullish Upside Breakout.
5. Cogent Incorporated (COGT) - Intermediate-Term Bullish Double Bottom.
   

Stock of the Week : Elan Corporation (ELN)

Elan Corporation (NYSE: ELN) is a pharmaceutical turnaround story that may soon get even better. The pharmaceutical company had a brush with bankruptcy in 2002 and reported a wider-than-expected loss of $405 million for 2007. However, the company said it expects a sharp turnaround in 2008, forecasing revenue growth of over 30 percent and possibly exceed $1 billion, driven by sales of its flagship multiple sclerosis drug Tysabri. The company currently receives 50 percent of the revenues from the drug when sales exceed $700 million. Altogether this turnaround story already has shares trading near their 52-week high, but many investors believe that they could get much higher next year. (Read More)

Article of the Week : Short Selling for the Average Investor

Short selling has traditionally been a technique reserved for the expert traders and investors, but a new set of ETFs released by ProShares may quickly change the landscape. Now, average investors can do more than just sit on the sidelines in a bear market – they can “safely” purchase ETFs that will enable them to profit from declines in the marketplace without being forced to open a margin account. (Read More)

Final Words

The market remains depressed and investors should be careful when investing in these climates. It is best to keep in stocks with international exposure and no credit risk.

Weekly Market Overview

U.S. stocks were mixed today after oil prices soared above $100 barrel and reignited fears that inflation will further injure the already troubled economy. These higher oil prices combined with falling home prices and a volatile stock market has many consumers curbing their spending and worried about the future. The Dow Jones moved down around 11 points while other major indexes also closed lower on the day, but advacing issues are head of decliners on the New York Stock Exchange. In the end, the economy still can add oil back to its concerns today as investors struggle to grip just how severely all of this will affect the all-important consumer.

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. The 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 Corporation (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.
   

Technical Analysis

1. Priceline.Com Inc. (PCLN) - Intermediate-term bullish symmetrical continuation triangle.
2. Hansen Natural Corporation (HANS) - Intermediate-term bullish symmetrical continuation triangle.
3. Millicom International Cellular S.A. (MICC) - Intermediate-term bullish symmetrical continuation triangle.
4. Genentech Inc (DNA) - Intermediate-term bullish triple bottom.
5. Superior Essex Incorporated (SPSX) - Intermediate-term bullish megaphone bottom.
   

Stock of the Week : Verizon and AT&T (VZ, T)

Verizon Communications Inc. (NYSE: VZ) and AT&T Inc. (NYSE: T) shares moved sharply lower after the two telecom providers announced new flat-rate plans. The move marks a shift from high margin services to lower margin staples that could put pressure on margins and may spark further reduction in prices aimed at increasing users. The commoditization of the wireless voice service industry is a move that many investors expected but dreaded as it could end up curbing growth rates and reducing valuations for many telecom providers. So, what does all of this mean for shareholders of VZ and T? (Read More)

Article of the Week : Short Selling for the Average Investor

Short selling has traditionally been a technique reserved for the expert traders and investors, but a new set of ETFs released by ProShares may quickly change the landscape. Now, average investors can do more than just sit on the sidelines in a bear market – they can “safely” purchase ETFs that will enable them to profit from declines in the marketplace without being forced to open a margin account. (Read More)

Final Words

The market remains depressed and investors should be careful when investing in these climates. It is best to keep in stocks with international exposure and no credit risk.

Weekly Market Overview

US stocks started the week lower after investors trimmed positions from last week's rally that saw the greatest increase in months. Financial firms moved lower on a rush of broker downgrades, while technology shares rose after Microsoft made its bid for Yahoo and Google may intervene. Many see this as a pause for the market to catch its breath after a strong rally follow the emergency rate cuts weeks ago. Nevertheless, many remain optimistic in a recovery while others still believe the United States is headed into a recession.

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.
   

Technical Analysis

1. Ust Inc. (UST) - Long-term bullish continuation diamond.
2. Aluminum Corporation Of China (ACH) - Intermediate-term bullish continuation wedge.
3. Sandisk Corporation (SNDK) - Intermediate-term bullish continuation wedge.
4. Cal-Maine Foods (CALM) - Intermediate-term bullish upside breakout.
5. W-H Energy Services (WHQ) - Long-term bullish continuation wedge.
   

Stock of the Week : J.C. Penney (JCP)

J.C. Penney (NYSE: JCP) has caught the eye of billionaire activist Carl Icahn who reporedly bought up a substantial stake in the company. The Deal Journal reported that the retailer may be among Icahn’s top five holdings, meaning his stake could run into the hundreds of millions of dollars. The move follows that of other activists, like William Ackman, into retailers that have been beaten down by a slowdown in consumer spending. Shareholders seem to be mixed on the news as shares started the day higher only to drop more than five percent. (Read More)

Article of the Week : Short Selling for the Average Investor

Short selling has traditionally been a technique reserved for the expert traders and investors, but a new set of ETFs released by ProShares may quickly change the landscape. Now, average investors can do more than just sit on the sidelines in a bear market – they can “safely” purchase ETFs that will enable them to profit from declines in the marketplace without being forced to open a margin account. (Read More)

Final Words

The market remains depressed and investors should be careful when investing in these climates. It is best to keep in stocks with international exposure and no credit risk.