November 2000
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Contents Back Issues March 2000 April 2000 May 2000 June 2000 July 2000 Aug. 2000 Sept. 2000 Oct. 2000 Investing Buy & Sell: Biotechnology sector Stocks for traders Model Portfolio Sold Bought Model Portfolio Chart |
Forget bloody Monday of 1987. Wednesday of October 18, 2000 was just as bad for the market. While the Dow Jones Industrial average fell 508 points, or 3.8% on October 19, 1987, on October 18, 2000 it was down 435 points, or 4.3% in the morning but managed to rebound and closed at 9975.02 points, down 114.68 points, or 1.14% for the day. (continued in: Investing). During the past year some of the small cap stocks in this sector took-off like a rocket and reached lofty levels. Some of these stocks have risen ten-fold in less than a year. This sector is highly cyclical and as more money flows into these stocks they could reach even higher levels. (continued in: Buy & Sell ). Speculators who like to trade frequently could buy stocks listed in this section. Investors should be aware that short-term trading involves much greater risk, and preferably no more than 10% of the portfolio may be invested in these stocks. Many of the stocks in the technology sector should be bought at recent low levels. Speculators could achieve short-term gains, up to 100% on some of these stocks. CMGI, Inc., (NASDAQ symbol: CMGI) finds, acquires, develops and operates Internet companies. It is one of the worlds largest Internet investment companies. CMGI consists of three venture capital funds. CMG Ventures III that was launched in 1998 has (continued in: Stocks for traders). Albertson’s, Inc. (NYSE symbol: ABS) is the second largest food-drug chain in the United States. After the merger with American Stores Company that was finalized on June 23, 1999, Albertson’s operates over 2,400 stores in 38 states. Among the stores operated by the Company are Albertson’s, Save-On, Osco Drug, Lucky Stores, Jewel, and Acme Markets. The merger will allow the Company to achieve greater (continued in: Model Portfolio). |
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Investing Forget bloody Monday of 1987. Wednesday of October 18, 2000 was just as bad for the market. While the Dow Jones Industrial average fell 508 points, or 3.8% on October 19, 1987, on October 18, 2000 it was down 435 points, or 4.3% in the morning but managed to rebound and closed at 9975.02 points, down 114.68 points, or 1.14% for the day. Although Nasdaq Composite Index fared worse in the morning, when it was down 187.86 points, or 5.84%, it managed to end the day at 3171.55, down 1.32%, or 42.40 points. Some of the large-cap tech stocks ended the day with a substantial loss. IBM closed at $95.44 per share, down 17.56, while Nortel Networks closed at $59.81, down 4.19. Majority of stocks have reached reasonable valuation levels and some of the Internet stocks that are down 80% are downright bargains. Dow Jones Industrial average started out at 10700.13 and then proceeded to ascend and closed at 10971.14 on October 31, 2000. NASDAQ fell 303.19 points, or 8.3% for the month and closed at 3369.63 on October 31, 2000. Many investors are still waiting on the sidelines with cash parked in 3-month Treasury bills, or short duration Certificates of Deposit. September and October are usually the two worst months of the year for the market. Although no one knows if the market has reached a bottom, at this point the downside risk is low. Investors should not panic. The worst thing an investor could do right now is to sell stocks and go into cash. In the previous months we have suggested that investors review their portfolios and sell some of the losing stocks and some of the gainers, generate some cash and be prepared. Perhaps the best time to do Tax-loss selling is in August and beginning of September, instead of waiting until the end of the year. By the end of the year, the stocks that have already fallen could descend some more and trade at a lower price. By cutting losses sooner, rather than later, investors could diminish the actual losses on non-performing equities. Now is the time to put this cash to work. More than half of the stocks on NASDAQ are off 50% from their 52-week high and the time to buy is right now. In September we had featured stocks of Advanced Micro Devices and CMGI, Inc., in Buy & Sell section. Both of these stocks broke through our initial buy target level, with AMD falling below $24 and CMGI falling below $28 per share. In October, both of these stocks were featured in the section: Stocks for traders, where we had stated that AMD could briefly test $18 level and then slowly proceed in the upward direction. AMD fell to $18.125 per share on October 18, 2000. Furthermore, we have stated that CMGI could fall briefly to $23 per share. During the sell-off in the Internet sector this stock broke through our revised target level and closed at $15.375 per share on October 17, 2000. Find out more about these two stocks in the section: Stocks for traders. Gross Domestic Product rose 2.7% for the third quarter, well below 3% projected by the analysts. Manufacturers are keeping their inventories at low level. Furthermore, consumer confidence fell to a year low in October. In our opinion, the economy could contract briefly. Due to the high price of oil, that in turns induces higher price of gasoline and high price of heating oil during winter season, consumers will have less money to spend on products that are not basic and could curtail their spending. As the economy contracts, the Fed will have to act quickly and lower the interest rate. In our opinion, the Fed could start lowering rates by May 2001, or sooner, to maintain soft landing and prevent economy from severe contraction. Investors should remain calm during this volatile time of the year. Do not let your emotions make your investment decisions’. In our opinion, during the next five months some of the tech stocks and Internet stocks could ascend to the levels approaching previous 52-week high. Some of these stocks could reward speculators with short-term gains as high as 300%. Investors have to be very selective. We maintain our bullish outlook on the market. Some of the stocks may never again reach such low levels and should be bought now. Back to Top |
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Buy & Sell During the past year some of the small cap stocks in this sector took-off like a rocket and reached lofty levels. Some of these stocks have risen ten-fold in less than a year. This sector is highly cyclical and as more money flows into these stocks they could reach even higher levels. These stocks are highly speculative because majority of these small companies have no products to sell, and once their funding ends many of these companies may go under. Investors who are risk averse could buy stock of Amgen, or Chiron, instead of the stocks of these small-cap biotech start-ups. On October 27, the stock of Amgen fell 9.19 and closed at $59.31 per share. Short-term, there is a probability that majority of stocks in this sector already have reached their highs. Although some of the stocks in this sector have tremendous long-term upside potential, speculators should be very selective and consider placing stop-loss orders after buying these stocks. Speculators could invest less than five percent of their assets in this sector. Abgenix, Inc. (NASDAQ symbol: ABGX) is an emerging leader in monoclonal antibodies. The Company has a proprietory XenoMouse™ technology that can be used to generate human antibody products. Previously, most of the antibody products were generated in mice therefore contained mouse protein that often caused adverse immune reactions in patients. XenoMouse™ technology allows for the development of antibodies with fully human protein sequences. Abgenix, Inc. has established collaborative arrangements with seventeen partners to produce fully human antibodies through the use of XenoMouse™ technology. Among these partners are Amgen, Chiron, Elan, Human Genome, and Pfizer. Abgenix, Inc. often receives upfront payments and is entitled to receive royalties on any future product sales by the collaborative partner. The Company provides collaborative partners with access to XenoMouse™ technology and in most cases Abgenix provides their mice to collaborative partners, who then carry immunizations with their specific antigen target. For 1999 contract revenues rose to $12.285 million from $3.842 million for 1998. The Company reported a loss of $20.499 million, or $1.41 a share versus a loss of $16.827 million, or $3.00 a share for 1998. As of December 31, 1999 there were 14,536,727 shares outstanding versus 5,602,963 shares on December 31, 1998. The Company had $58 million of cash and marketable securities as of December 31, 1999. In 1999 research and development expenses rose to $21.1 million from $17.6 million in 1998. The Company executed agreement with Japan Tobacco that became effective on December 20, 1999 under which Abgenix acquired Japan Tobacco’s interest in the XenoMouse™. Abgenix, Inc. did a follow-on offering on February 10, 2000. The Company offered 3 million shares of common stock to the public at $210.00 per share. Abgenix received $496.5 million from the offering, after the underwriters’ fees. In our opinion, cash proceeds received from the latest stock offering could fund Abgenix’s expenses for at least five years. By then, some of the products could be already on the market and the Company could start receiving royalties. Although the long-term outlook for the Company is positive, speculators should be aware that the risk of owning this stock is high. This stock traded as low as $5.38 per share in the third quarter of 1998 and reached a high of $413 in the first quarter of 2000 (before the 2-for-1 stock split). Although short-term this stock could reach a higher level, in our opinion intermediate upside potential is low and speculators who buy this stock now should place a stop-loss order once the stock is bought. We rate this stock a moderate buy (on October 31, price $78.88, dividend Nil, and P/E n/m). AVAX Technologies, Inc. (NASDAQ symbol: AVXT) is a biopharmaceutical company developing products for the treatment of cancer. The Company is currently conducting development of products in three categories: Autologous Cell Vaccines (AC Vacine™ Technology), Topoisomerase Inhibitors, and Anti-Estrogens. The Company is conducting registration trial of M-Vax™ in stage III melanoma, and Phase 2 trial of O-Vax™ for treating ovarian cancer. In 1999 AVAX received orphan Drug Status for M-Vax™, furthermore the Company entered into collaboration with the University of Tokyo to investigate AC Vaccine technology for treating breast cancer. AVAX opened its vaccine manufacturing facility in Philadelphia in 1999. The facility will allow the Company to produce vaccines for use in clinical trials. Furthermore, this facility will allow AVAX to have full control over the quality and sterility of its vaccine. The Company announced in June 1999 that it would begin to market M-Vax™ in Australia. AVAX also plans to market M-Vax™ vaccine in Germany, the Netherlands and Japan. The Company continues to post operating losses. For 1999 net loss rose to $7.868 million, or $0.74 a share, versus a loss of $5.838 million, or $0.87 a share for 1998. Before the Company may proceed with sales of its vaccines, it must go through lengthy clinical trials to demonstrate that its products are safe and effective. There is no guarantee that the Company will obtain regulatory approval to sell its products. The stock reached a 52-week high of $15 an March 2000 and then proceeded to descend. AVAX is a development stage biopharmaceutical company and it may not be successful in getting FDA approval for its vaccines. The risk of owning this stock is high and it could be bought only by speculators. This stock is in a downtrend and could fall to approximately $3 per share. If the stock were to reach this level, speculators could acquire small position. In the future, this speculative stock could once again revisit its high of $15 per share and once it does, speculators should sell it immediately (on October 31 price $5.97, dividend Nil, and P/E n/m). Avant Immunotherapeutics, Inc. (NASDAQ symbol: AVAN) is a biopharmaceutical company engaged in the development of several products. The Company is developing a proprietary therapeutic vaccine for the management of arteriosclerosis, and Therapore™ for the delivery of immunotherapeutics for chronic viral infections. In addition, the Company is developing vaccines for prevention of influenza, and Lyme Disease. Avant is also developing an oral rotavirus vaccine and cholera vaccine. For 1999 the Company reported net loss of $11.3 million, or $0.26 a share, versus a loss of $51.8 million, or $1.56 a share for 1999. The net loss was much higher in 1998 due to a charge of $44.630 million for purchased in-process research & development. As of December 31, 1999 the Company had $13.619 million in cash and marketable securities, and a stockholder equity of $17.413 million. There were 44.076 million shares outstanding. On September 22, 1999 the Company sold 5.5 million shares of common stock at $1.92 per share, through a private placement, for a total amount of $10.5 million. Novartis exercised its option to license TP 10 inhibitor for use in the field of transplantation, that resulted in a $6 million payment by Novartis to AVANT in January 2000. AVANT plans to proceed with Phase III pivotal trial by the end of this year. The Company is developing a vaccine for treating arteriosclerosis. Arteriosclerosis is the leading cause of mortality in the United States. It leads to accumulation of fat deposits in the walls of blood vessels. This novel vaccine stimulates the production of antibodies to cholesteryl ester transfer protein that balances HDL and LDL (low-density lipoprotein, or “bad” cholesterol). The Company plans to initiate phase II trials in 2000 and if the data obtained from these trials is positive AVANT will seek a corporate partner to complete development of this vaccine. This stock traded at a low level of $1.75 per share in December 1999. As the stocks in this sector were bid up to lofty levels, this stock reached $14.875 per share in March 2000. Afterwards, as the market proceeded to reverse its upward trend, the shares of AVANT closed at $8.44 per share on October 31, 2000. Once again, we would like to remind speculators that this stock is extremely risky, just like any other small-cap stock in this sector. Although the long-term outlook looks promising, short-term this stock could remain very volatile and may fall to approximately $4 per share. Speculators could acquire a small position in this equity and hold it long-term. If the clinical trials of vaccine to treat arteriosclerosis are successful and the Company were to find a partner to market this vaccine, we estimate it could generate $50 million, or more annually in royalty payments (on October 31 price $8.44, dividend Nil, and P/E n/m). Bio Transplant Incorporated (NASDAQ symbol: BTRN) is developing pharmaceutical products to treat a variety of medical conditions such as cancer, autoimmune disease, and organ transplantation. The Company continues to develop its AlloMune™ Cancer System to treat certain types of blood cancers. In 1998, researchers at Massachusetts General Hospital performed a double transplant of donated kidney and bone marrow in the patient. Because of the innovative technologies developed by Bio Transplant, the patient did not have to be subjected to lengthy treatment with immunossupressive drugs to prevent kidney rejection. The patient was able to maintain normal kidney function. In 1999, Bio Transplant opened Phase I/II AlloMune™ System multi-center clinical trial sites for refractory lymphoma patients. The Company issued two patents covering key technologies used in AlloMune™ System and XenoMune™ System. The Company’s XenoMune™ System is designed to increase the supply of organs for organ transplantation to enable the transplantation of organs from miniature swine into humans. Bio Transplant is developing Xeno Mune™ System in collaboration with Novartis Pharma AG. In addition, Bio Transplant is developing its ImmunoCognance™ technology that can reduce, or eliminate the need for lifelong immunosuppressive therapy to patients who have received transplant of foreign cells, tissues, and organs For 1999 total revenue rose to $9.471 million, from $8.006 million for 1998. The Company reported a loss of $1.01 a share for 1999 versus a loss of $1.07 a share for 1998. As of December 31, 1999 the Company had $17.649 million of cash and cash equivalents. The Company has incurred losses since its inception and will continue to incur losses for a few more years. Bio Transplant Incorporated will require additional funding to conduct research and development. In our opinion, this stock is highly speculative. Although Novartis AG is a strong collaborative partner, if the clinical trials were not successful, Novartis could withdraw from the project. Furthermore, if the Company is not able to obtain additional financing in the future, the Company could run out of cash. In October 1999, this stock traded at a low level of $4.875 per share. After reaching a 52-week high of $23 this stock proceeded to fall and closed at $13.38 on October 31, 2000. Speculators who own this stock could sell it now and buy a tech stock such as Advanced Micro Devices (NASDAQ symbol: AMD) for a short-term trade. Cell Genesys, Inc. (NASDAQ symbol: CEGE) is a biotech company that has focused its research and development on human disease therapies. The Company plans to develop and commercialize gene therapies to treat cancer and hemophilia. Cell Genesys is conducting clinical trials for GVAX® cancer vaccines in Phase II studies for prostate cancer and Phase I/II studies for lung cancer. These studies are being developed through a collaboration with the pharmaceutical division of Japan Tobacco Inc. Cell Genesys was already issued, or granted 220 patents and has over 335 patents pending. The Company’s annual revenue rose to $33.607 million for 1999 from $24.146 million for 1998. For 1999 the Company reported net loss of $12.386 million, or $0.39 a share versus a loss of $13.216 million, or $0.46 a share for 1998. As of December 31, 1999 the Company had $50.287 million of cash and short-term investments. In addition, the Company had $433.3 million of equity in Abgenix, Inc. In our opinion, Cell Genesys has a strong financial position to expand its research and development. Furthermore, the Company could acquire, or merge with another biotech start up. This stock traded at a low level of $8.125 per share in October 1999 and then proceeded to ascend to a high level of $61.75 in March 2000. Since then the stock has dropped substantially and closed at $23.06 per share on October 31, 2000. Although the risk of owning this stock is high, speculators could acquire small position and hold it long-term, at least 5 years (on October 31 price $23.06, dividend Nil, and P/E n/m). Human Genome Sciences (NASDAQ symbol: HGSI) was founded in 1992. Through the use of genomics, the Company plans to develop genomics-based drugs. In 1999, the Company entered three drugs into clinical trials. Two of these drugs are repifermin and Myeloid Progenitor Inhibitory Factor. Both of these drugs are in Phase II trials to evaluate their effectiveness. Human Genome Sciences has initiated a new collaboration agreement with Abgenix, Inc. In addition, the Company has an agreement with several major pharmaceutical manufacturers. In the future, Human Genome Sciences will be entitled to receive royalties from all the drugs that are discovered by these pharmaceutical manufacturers through the use of technology developed by Human Genome Sciences. For the year of 1999, the Company reported revenues of $24.524 million, down from $29.598 million for 1998. The Company reported net loss of $42.2 million, or $0.92 a share versus a net loss of $23.2 million, or $0.52 a share for 1998. For 1999 research and development expenses rose to $60.6 million versus $47 million for 1998. The Company has filed patents that describe over 7,500 novel human genes. During 1999, the Company issued two convertible note offerings and these raised $325 million. Afterwards, Human Genome Sciences has raised an additional $525 million through two fallow-up offerings of convertible notes. The Company had over $900 million in cash and investments as of March 31, 2000. In our opinion, the Company could continue to incur losses for a few more years. The existing $900 million hoard of cash and investments could be sufficient to fund the Company’s operations during this time frame. Long-term this stock has great potential, but short-term this equity could remain very volatile. Once the collaborative partners develop new drugs through the use of technology developed by Human Genome Sciences, after these are approved by FDA, the Company could receive over $100 million annually in royalty payments. That is in a distant future. In the meantime this stock could remain very volatile. In October 1999 this stock traded at a low level of $18.43 per share and then rose to a 52-week high of $116.38 per share in March 2000. On October 31, this stock closed at $88.39 per share. This Company has one of the largest cash hoards in this sector, therefore the risk of owning this stock is smaller than owning any other stock in this sector. Speculators could acquire a small position in this equity and hold it long-term (on October 31 price $88.39, dividend Nil, and P/E n/m). Back to Top |
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Stocks for traders Speculators who like to trade frequently could buy stocks listed in this section. Investors should be aware that short-term trading involves much greater risk, and preferably no more than 10% of the portfolio may be invested in these stocks. Many of the stocks in the technology sector should be bought at recent low levels. Speculators could achieve short-term gains up to 100%, or higher, on some of these stocks. CMGI, Inc., (NASDAQ symbol: CMGI) finds, acquires, develops and operates Internet companies. It is one of the worlds largest Internet investment companies. CMGI consists of three venture capital funds. CMG Ventures III that was launched in 1998 has a minority interest in Raging Bull www.ragingbull.com a web site dedicated to investors, and a minority interest in Virtual, Inc. CMGI, Inc. has developed a strategy to acquire start-up Internet companies, and then either sell them out right, or sell a minority interest and reinvest the proceeds. The company has a history of acquiring successful Internet companies. David Wetherell, who is a CEO of CMGI, Inc., continues to steer the company on the Internet path to high growth. In our opinion, the best decision was to form a strategic partnership with Compaq Computer Corporation (NYSE symbol: CPQ). CMGI, Inc. acquired a majority stake in Alta Vista, while Compaq retained 17% equity ownership in the Alta Vista business. Through this partnership, both companies plan to establish Alta Vista as one of the worlds leading Internet networks. To find out more about Alta Vista, visit the company’s Web site at www.altavista.com and to find out more about CMGI, Inc., visit the company’s Web site at www.CMGI.com In our opinion, tremendous growth opportunities are ahead. Although the stock of CMGI is trading at a high P/E ratio, in our opinion earnings could grow 60% annually and bring the price to earnings ratio down to a reasonable P/E 50 in two years. On January 12, 2000, the company issued a 2-for-1 stock split. This stock has been in a downtrend since March 2000. During September this stock proceeded to fall at a fast pace. On September 27, this stock broke through our target level of $28 and closed at $26.63 per share. Last month, we have stated that there is a probability that this stock could fall briefly to $23 per share. Due to the tremendous sell-off in the Internet sector, this stock broke through our revised target level and closed at $15.38 on October 17, 2000. This stock could reach approximately $90 per share during the first half of 2001. On the other hand, this is a very conservative target level and there is a probability that this stock could test its previous 52-week high of $163.50 per share. Although patient investors could acquire this stock and hold it long-term, due to the high volatility and a wide trading range, this stock could be traded by speculators. This stock closed at $16.88 per share on October 31, and we rate it a strong buy. We are very optimistic about the stocks of Internet incubators such as CMGI, Inc., and Internet Capital Group. On October 30, two hundred shares of Internet Capital Group were bought at $11.63 per share and added to our Model Portfolio (read: Bought). Advanced Micro Devices, Inc. (NYSE symbol: AMD) manufactures microprocessors, flash memory devices, data communications products and network products. AMD and Intel continue their fierce competition. While the demand for microprocessors continued to grow worldwide, Intel Corporation was not able to produce enough chips due to insufficient manufacturing capacity. During that time AMD was able to increase its market share. AMD could continue to spend large percentage of its gross revenues on research and development and try to keep pace with Intel by introducing faster processors to the market. As AMD sells a larger quantity of higher priced processors, the average selling price will continue to rise, thus improving profit margins. The stock of AMD reached a 52-week high of $94.63 per share on June 21, 2000 (after the recent 2-for-1 split this high was adjusted to $47.32). Before the Company issued the split, the stock was already in a downtrend. Although this timely stock could be held long-term, speculators who trade it short-term may achieve better return on investment. Worldwide demand for microprocessors continues to grow 17 percent annually. At this time chipmakers do not have sufficient manufacturing capacity to meet this growing demand and that will guarantee that every processor made, will be sold almost immediately. Starting in September, the sales of chips typically rise and the demand reaches the highest level by December. On August 31, this stock closed at $37.63 per share. During September this stock proceeded to descend, broke through our initial target level of $24 per share and closed at $23.63 on September 29, 2000. Last month we have stated that this stock could briefly test $18 level. On October 18, AMD closed at $18.125 per share and then proceeded in the upward direction. On October 31, this timely stock closed at $22.63 per share and we rate it a strong buy. During the first half of 2001, AMD could reach approximately $85 per share and speculators should sell it immediately to lock-in a probable gain of $61 a share, or 250 percent. Unisys Corporation (NYSE symbol: UIS) is a major provider of customer services and information services. The Company makes network servers and software. Unisys derives 67 percent of revenues from services, where profit margins are much higher than margins on hardware. The Company projects that in a few years, services business could generate approximately 75 percent of annual revenues. In September of 1999, the stock reached a high of $49.68 and then during the following months fell below $25 per share. In February 2000, the stock proceeded to revisit its high, but due to strong resistance at $35 level proceeded to descend once again. Due to the sell-off in the tech sector, this stock continued to descend in July and closed at $9.54 per share on July 27. This stock could retest its recent high, but in our opinion will find strong resistance at $20 level. Nevertheless, if this were to happen, it could provide speculators with a short-term gain of approximately $7.25 per share, or 60 percent, during the next six weeks. On the other hand, patient investors could buy this stock now and hold until it revisits its previous high of $49.68 per share reached during September 1999. As the services business continues to grow, profit margins could accelerate and the earnings for the year 2001 could rise above $2 a share, the stock could break through the previous high and provide investors with a probable gain of $40 per share, or 300 percent in approximately one year. This stock was included in our list in July 2000. Since then the stock fell an additional five points and on July 31, closed at $9.68 per share. After testing its bottom in July, this stock proceeded to reverse its downtrend and closed at $13 per share on August 31, 2000. This stock rose to $14.38 on September 8. Afterwards, the stock proceeded to fall and found strong support at $10.18 on September 26, 2000. Once this timely stock breaks through its recent high of $14.38 it could reach approximately $19 per share during the next six weeks. This timely stock is trading at a low P/E multiple. On October 31, this timely stock closed at $12.75 per share. We still rate this stock a strong short-term buy and a screaming long-term buy, depending on the objective and the time frame of the investor. Investors who already own this stock could add to their position. Computer Associates International, Inc. (NYSE symbol: CA) designs business application software and systems management software that allows computers to run efficiently. In addition, the Company provides software that allows corporations to manage Web infrastructure. The Company is the third largest after Microsoft Corporation and Oracle Corporation. Computer Associates International has offices in 44 countries. As of March 31, 2000, there were 557 million shares outstanding. For the fiscal 2000, ended March 31, 2000, revenues rose to $6.1 billion, from $4.666 billion for fiscal 1999. Net income rose to $696 million, or $1.25 a share, from $626 million, or $1.11 a share for fiscal 1999. The Company took a charge of $800 million for purchased research and development. In our opinion, without this charge earnings could have been as high as $2.68 a share. Computer Associates International acquired Platinum Technology International for $3.5 billion in cash. The Company also acquired Sterling Software, Inc. As of March 31, 2000, total outstanding debt reached $5.4 billion. During fiscal 2000, the Company generated $1.566 billion of cash from operations and in our opinion it is sufficient to cover the repayment of debt. In our opinion, the short-term and the long-term outlook for the Company is very good. As the debt level falls, earnings could reach $2.50 a share for fiscal 2002, thus propelling the stock to a probable level of approximately $98 per share. After reaching a 52-week high of $79.44 in January 2000, the stock proceeded to descend and closed at $24.78 per share on July 31, 2000. On September 7, this stock closed at $32.55 and then proceeded to fall. The stock retested its low of $25 on September 21, and then closed at $25.31 per share on September 29. The resistance level is at $33 and once this stock breaks through this level it could ascend to approximately $40 and then pull back again. In our opinion, this timely stock has potential to revisit its 52-week high during the next eight months. This stock was added to our list of: Stocks for traders, in August 2000. On October 31, this timely stock closed at $31.88 per share. We maintain a strong buy rating on this stock. Maxtor Corporation (NASDAQ symbol: MXTR) manufactures and markets disk drives for personal computers. The company sells its products to Original Equipment Manufacturers, distributors, and retailers. For the fiscal 1999, ended January 1, 2000, revenues rose to $2.486 billion, from $2.409 billion for fiscal 1998. The Company reported a loss of $50.1 million, or $0.48 a share for fiscal 1999, versus a net income of $31.2 million, or $0.47 a share for fiscal 1998. This stock reached a high of $21.25 in January of 1999. Recently, the Company announced that it would acquire Quantum’s hard drive division (NYSE symbol: HDD) for $1 billion in stock. In our opinion, long-term this acquisition will improve economies of scale and increase profit margin. In a short-term, the Company could record a charge related to the merger and this could immediately be reflected in a lower price of the stock. In our opinion, this stock could fall to approximately $6 per share and remain at that level for a few months. Speculators could switch from Maxtor to Internet Capital Group (NASDAQ symbol: ICGE) for a short-term trade. Boston Scientific Corporation (NYSE symbol: BSX) is one of the worlds leading companies that designs and markets minimally invasive medical devices. The company makes coronary stents for less invasive treatment of cardiovascular disease. The stock has reached a high of $47.06 on July 19, 1999. Afterwards, the stock proceeded to fall at a fast pace and by October 1999, fell to an intra-day low of $17.55 per share. Recently this stock proceeded to ascend and reached $19.06 per share on September 11. Afterwards, the stock proceeded to fall and closed at $15.94 per share on October 31, near its support level. We have downgraded this stock to accumulate from buy. This stock could trade in a narrow range during the next four months. Speculators who are willing to wait, could buy BSX at this level and if it were to reach $34 per share by May of 2001, sell it immediately. TJX Companies, Inc. (NYSE symbol: TJX) is the leading off-price retailer of apparel and home fashions. The Company operates T.J.Maxx ® stores, Marshalls ®, and A.J.Wright off-price retail stores in the United States. In Canada, the Company operates Winners Apparel Ltd. and in United Kingdom T.K. Maxx ™ off-price apparel stores. For the fiscal 1998, that ended January 30, 1999, revenues rose to $7.95 billion, from $7.39 billion for fiscal 1997. Net income rose to $424 million, or $1.29 a share, from $305 million, or $0.91 a share for fiscal 1997. As of January 30, 1999, there were 334.6 million shares outstanding, versus 349.6 million shares a year earlier. After completing a $250 million stock repurchase program, the Company announced in October 1998, that it plans to repurchase $750 million of its common stock over several years. The Company has repurchased 17.6 million shares at a cost of $501.1 million by October 30, 1999. All share repurchases were funded by internal cash flow. In April, we suggested that speculators monitor this stock closely and buy it when it pulls back to $18 per share. This stock closed at $18 per share on May 11, 2000. Last month, we have stated that this stock could reach our target level of $27 per share during the next two months. On October 31, this timely stock rose above our target level and closed at $27.25 per share, a new 52-week high. Speculators should sell this stock now and use the proceeds to buy CMGI, Inc. (NASDAQ symbol: CMGI) or Internet Capital Group (NASDAQ symbol: ICGE) for a short-term trade. Quantum Corporation is a major manufacturer of hard drives for systems ranging from personal computers to servers. The company also makes tape drives, and solid-state disk drives. The stock was previously listed on NASDAQ under the symbol: QNTM. The management of Quantum Corporation has decided to issue two tracking stocks, the Hard Disk Drive (symbol: HDD) and the Storage Systems Group (symbol: DSS). Both stocks trade on NYSE. On October 31, Quantum HDD closed at $11.44 while Quantum DSS closed at $15 per share. Maxtor Corporation offered to acquire Quantum’s hard disk drive division for $1 billion in stock. Speculators should sell Quantum hard disk drive (NYSE symbol: HDD) and buy Internet Capital Group (NASDAQ symbol: ICGE) for a short-term trade. The stock of Storage Systems Group (DSS) could reach our target level of $20 per share during the next four months. At that level this stock should be sold immediately. Bank One Corporation (NYSE symbol: ONE) is among the largest bank holding companies in the United States. Due to the losses in its credit card division, earnings fell and the stock reached a low of $24.44 per share on March 7, 2000, after reaching a 52-week high of $63.54 in May of 1999. After Bank One announced that James Dimon, formerly of Citigroup Inc., would become its CEO, the stock closed at $34.25 up $3.38 on March 28, 2000. In April we stated that this stock could pull back to approximately $28 per share and speculators could start accumulating it at that level. On May 8, the stock of Bank One Corporation reached an intra-day low of $28.75 and then resumed its upward momentum. Money is flowing into stocks in this sector and this timely stock proceeded to build a strong upward momentum. On October 31, this timely stock closed at $36.50 per share. We maintain a buy rating on this stock. This stock could reach our target level of $50 per share during the next nine months. Once this stock reaches our target level, speculators should sell it immediately. Back to Top |
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Model Portfolio Albertson’s, Inc. (NYSE symbol: ABS) is the second largest food-drug chain in the United States. After the merger with American Stores Company that was finalized on June 23, 1999, Albertson’s operates over 2,400 stores in 38 states. Among the stores operated by the Company are Albertson’s, Save-On, Osco Drug, Lucky Stores, Jewel, and Acme Markets. The merger will allow the Company to achieve greater economy of scale, thus improving profit margins. Just a few months ago, on June 1, 2000, the stock closed at $38.87 per share. Three years ago the stock of Albertson’s displayed a similar trading pattern and it could once again repeat itself. Typically, the fourth fiscal quarter that ends in January is the best in this sector. This timely stock could revisit its recent high of $38.87 by the end of the year, for a probable short-term gain of approximately 70 percent. On October 31, this stock closed at $23.69 per share. As soon as this stock reaches our target level of $36 per share, these 200 shares will be sold immediately. Applied Materials, Inc. (NASDAQ symbol: AMAT) is a major supplier of wafer processing equipment that is used to produce semiconductors. The Company produces systems that use physical vapor deposition technology, chemical vapor deposition and oxide etching. For the fiscal year ended October 31, 1999, revenues rose to $4.86 billion, a 20 percent increase from $4.04 billion for fiscal 1998. Net income rose to $748 million, or $1.89 a share, from $417 million, or $1.10 a share for fiscal 1998. The demand for the company’s equipment continues to accelerate in line with the growing sales of computers and telecommunication devices. Applied Materials estimates that the market for wafer fabricating equipment could double in two years to $43 billion annually. The long-term outlook for the Company is excellent. On October 14, 1997, and on March 16, 2000, Applied Materials split its stock 2-for-1. On October 31, this stock closed at $53.13 per share. At this price level, we rate this stock a strong long-term buy. Boston Scientific Corporation (NYSE symbol: BSX) is one of the worlds leading companies that designs and markets minimally invasive medical devices. The Company makes coronary stents for less invasive treatment of cardiovascular disease. This stock has reached a high of $47.06 per share on July 19, 1999. A month later, the stock proceeded to fall at a very fast pace and by October 1999, fell to an intra-day low of $17.43 per share. On June 30, this stock closed at $21.94 per share and then proceeded to descend. After reaching $19.06 on September 11, this stock proceeded to fall and closed at $15.94 per share on October 31, near its support level. We have downgraded this stock to accumulate from buy. Speculators who are willing to wait, could buy this stock now and if it were to reach our revised target level of $34 per share by May 2001, sell it immediately. Cisco Systems, Inc. (NASDAQ symbol: CSCO) makes data networking equipment, data switches, and networking gear. For fiscal 1999, that ended July 31, revenues rose to $12.2 billion, a 43% increase from $8.5 billion for fiscal 1998. Net income rose to $2.096 billion, or $0.62 a share, from $1.355 billion, or $0.42 a share for fiscal 1998. Cisco Systems continues to expand its market share. The annual revenues have grown from $2.2 billion in fiscal 1995, to $12.2 billion in fiscal 1999. John T. Chambers, who is a CEO of Cisco Systems, continues to steer the company on a path to high growth. Since 1994 the stock of Cisco Systems, Inc. has risen twenty-fold and the long-term outlook for the company is excellent. In our opinion, Cisco Systems, Inc. could continue its acquisition spree and the annual revenues might reach $50 billion in six years. Cisco Systems, Inc., is positioned to offer the latest equipment to service providers, such as IP internetworking technology which allows to host Internet applications and expand their service from basic voice traffic to broadband which can carry data, provide Internet access, and video conferencing. On March 23, 2000, this stock split 2-for-1. During the past four weeks this stock edged lower and closed at $53.88 per share on October 31, 2000. At this level, we rate this stock a strong buy. Hold this stock at least ten years. Compaq Computer Corp (NYSE symbol: CPQ) is the second largest computer manufacturer in the world. The Company designs and makes notebook personal computers, servers, consumer PCs and networking equipment. The turnaround is taking longer than expected. Although revenues continue to grow, the earnings are still below the levels reached two years ago, therefore we recommend this stock to patient investors who are willing to hold it at least five years. The Company has efficient manufacturing operation and manages to turn over its inventory of PCs eleven times per year. Compaq sold 83% of interest in Alta Vista Web site to CMGI, Inc. Compaq retained 17% equity in the Alta Vista. Both companies will promote this site. In the future it could become one of the top three sites and generate substantial amount of revenues. This stock has a strong potential to gain 500% in five years. On October 31, this stock closed at $30.41 per share. Patient investors could buy this stock on dips and hold it long-term. Compuware Corporation (NASDAQ symbol: CPWR) makes software that manages corporate networks, and improves productivity. The revenues are growing at a fast pace, and for the fiscal 1999, reached $1.65 billion. The stock of Compuware Corporation reached $40 per share in December 1999. On March 31, we have stated that there is a probability that this stock could fall to $16 per share during the next three months. When this stock fell below $13 per share, an additional 200 shares were bought at $12.38 on April 14, 2000. Due to the negative sentiment for this sector, we have revised our short-term target level to $28 per share, from $35 per share. Once this stock reaches our revised target level, these two hundred shares will be sold immediately. The remaining 150 shares will be held long-term, at least three years. Delia’s, Inc. (NASDAQ symbol: DLIA) sells a variety of apparel and accessories for young women. The Company conducts sales through its Web site and through brick and mortar stores. This stock reached a 52-week high of $40 per share in April 1999, and then proceeded to fall along with other Internet stocks. By November 1999, this stock reached a low of $5.50 per share. Afterwards, the stock proceeded to rise, buoyed by optimistic expectations of higher holiday sales and reached an intra-day high of $13.25 in November 1999. On October 31, this stock closed at $1.50 per share and at this level we rate it a speculative buy. This stock will be held in the Model Portfolio until it reaches our revised target level of $25 per share and then all of 200 shares will be sold. Delia’s, Inc. will merge with i Turf, Inc. subject to shareholders approval. Merged company will be called Delia’s i Turf, Inc. Dell Computer Corporation (NASDAQ symbol: DELL) is the third largest computer manufacturer in the world. The Company makes personal computers, notebook computers, servers and workstations. On March 5, 1999, the Company issued a 2-for-1 stock split, the seventh in the past eight years. During the past twelve months the price of the stock has almost stood still compared to the previous years. On March 22, the stock reached an intra-day high of $59.68 per share. Then, the stock proceeded to pull back. During summer, sales of computers are slower than at other time of the year. The sales should start rising in September and the stock could reach a new high of $65 per share before the end of this year. Although it is not likely that the stock of Dell Computer will appreciate at such a fast pace as it did during the past five years, in our opinion, the stock could generate a gain of 1,200% in six years. This stock closed at $29.50 per share on October 31. At this price level we rate this stock a screaming buy. Patient investors should hold this stock long-term, at least five years. Ericsson LM Telephone (NASDAQ symbol: ERICY) is a leading supplier of mobile phones and telecommunications equipment. The Company’s main manufacturing facilities are located in Sweden. Ericsson’s telecom equipment is among the most advanced in the world. The sales of equipment have increased significantly in China and surpassed the sales in U.S. Ericsson LM Telephone projects that by the year 2003 the number of mobile phone users could rise to over 800 million. The long-term outlook for Ericsson is excellent. ADR’s of Ericsson split 4-for-1 on May 8, 2000. On October31, ADR’s closed at $13.88. Buy these ADR’s now and hold at least seven years. Intel Corporation (NASDAQ symbol: INTC) is the leading manufacturer of microprocessors. The Company has high name recognition, and still has approximately 85% share of the market. For 1999, revenues rose to $29.4 billion, from $26.3 billion for 1998. Net income rose to $7.3 billion, or $2.11 a share, from $6.1 billion, or $1.73 a share for 1998. The Company continues to switch production to 0.18 micron manufacturing process that yields more semiconductors from each wafer. During the past ten years earnings grew 32% annually. The stock of Intel Corporation has kept rising ever since 30 shares were bought in March of 1995, at $78.25 per share. The Company issued a 100% stock dividend on June 22, 1995, another one on July 14, 1997, a 2-for-1 stock split on April 11, 1999, and another 2-for-1 split on July 30. Since the original 30 shares were bought, after these stock splits there were 480 shares in the portfolio. On October 30, two hundred shares were sold and now there are 280 shares in the Model Portfolio. Recently this stock proceeded to fall and closed at $41.56 per share on September 29. On October 31, this stock closed at $45 per share. At this price level we rate this stock a strong buy. Lucent Technologies, Inc., (NYSE symbol: LU) is the largest manufacturer of the telecommunications equipment. Lucent Technologies makes fiber-optic equipment and optical network equipment that allows the phone companies to increase the capacity and to provide a high speed Internet access. During the year of 1999, the stock continued its strong upward momentum and reached a 52-week high of $84 3/16 per share in December. Then, in January 2000, the stock fell at an extremely fast pace and closed at a 52-week low of $49.79 per share. Afterwards, the stock proceeded to ascend and reached an intra-day high of $75.38 per share on March 1, 2000. During the recent correction, the stock tested its bottom again. As the telecommunications providers buy new equipment, the annual revenues of Lucent could grow in double digits and may reach $80 billion in five years, a double from present annual revenues. In our opinion, the long-term outlook for the Company is excellent. The stock of Lucent Technologies, Inc., will be held in the Model Portfolio at least ten years. Due to the sell-off in this sector, the stock fell to a low level of $20 per share in October. On October 31, this stock closed at $23.31 per share. We maintain our rating of screaming long-term buy. Merck & Co., Inc. (NYSE symbol: MRK) manufactures a variety of pharmaceutical products. Major brand names include Vasotec, Mevacor, Zocor, Crixivan, and Propecia. The Company derives 34 percent of revenues from international sales. Merck continues to spend substantial percentage of gross revenues, on research and development. Merck & Co. split its stock 2-for-1 on February 17, 1999, and now there are one hundred shares in the Model Portfolio. On October 31, this stock closed at $89.94 per share. Buy this stock on dips and hold long-term. Microsoft Corporation (NASDAQ symbol: MSFT) is the largest maker of software. The operating system made by Microsoft is used in the majority of computers. The Company has no debt and has approximately $17 billion in cash and short- term investments. For fiscal 1999, ended June 30, 1999, revenues rose to $19.747 billion, from $15.262 billion for fiscal 1998. Net income rose to $7.785 billion, or $1.42 a share, from $4.490 billion, or $0.84 a share for fiscal 1998. Stockholders equity rose to $28.438 billion from $16.627 billion for fiscal 1998. On March 29, 1999, the Company issued a 2-for-1 stock split. The anti-trust trial affected the stock negatively. While the Justice Department accused Microsoft Corporation of wielding a monopoly power, the company denied any wrongdoing. Is the break-up of Microsoft Corporation the only solution? Of course not. As soon as this chapter in Microsoft’s history is closed, the stock could resume its strong upward momentum, but in the meantime this stock will be very volatile. Although these timely shares may not appreciate at previous fast pace, this stock could generate a gain of 700% in six years. The stock will be held long-term, at least five years. On October 31, this stock closed at $68.89 per share. At this price level we rate this stock a strong buy. Investors, who already own this stock, could add to their position. Nokia Corporation (NYSE symbol: NOK) is the world’s second largest manufacturer of mobile phones. The Company is located in Finland, with subsidiaries in the United Kingdom and China. Nokia derives 56% of its revenues from sales in Europe and 44% from sales in other continents. The long-term outlook for Nokia is excellent, as the demand for company’s products grows worldwide. The Company issued a 2-for-1 split on April 16, 1998, one on April 11, 1999, and a 4-for-1 split on April10, 2000. These timely ADRs closed at $42.75 on October 31. Buy and hold at least seven years. Office Depot, Inc. (NYSE symbol: ODP) is a major retailer of office products, with stores located in the United States and Canada. The Company also conducts sales through its Web site at www.officedepot.com and through a catalog. For the year of 1999, revenues rose to $10.27 billion, from $9 billion for 1998. Earnings rose to $0.69 a share, from $0.60 a share for 1998. On April 12, 2000, the stock rose to $14 3/16 per share on a heavy volume of 4.45 million shares, and then proceeded to fall. Four weeks later, on May 12, the stock closed at $11 per share, on a low volume of 688,000 shares. Then, on May 26, the stock fell 3 from the previous close, and finished the day at $7.32 per share, on a very heavy volume of 16 million shares. In our opinion, this stock is oversold. On October 31, the stock closed at $8.31 per share. This stock is trading at ten times earnings, and at this low level we rate it a strong buy. The sell-off in this stock was overdone. This stock will be held in the Model Portfolio until it reaches our target level of $19 per share, and then all four hundred shares will be sold, for a probable long-term gain of 200 percent. PepsiCo, Inc. (NYSE symbol: PEP) makes soft drinks, Doritos, Sun Chips, Ruffles potato chips and Lays potato chips. For 1999, revenues edged lower to $20.4 billion, from $22.3 billion for 1998. Net income rose to $2 billion, or $1.37 a share from $1.99 billion, or $1.31 a share for 1998. In 1998, PepsiCo acquired Tropicana and several snack chip businesses in Europe, Australia and Chile. In the past forty years, PepsiCo sales grew an average of 16% per year. After the Company had spun-off its restaurants in 1997, the return on assets deployed rose from 9.5% in 1996, to 16.2% in 1997. PepsiCo continues to buy back its stock. On October 31, this stock closed at $48.44 per share. Buy on dips and hold long-term. Pfizer, Inc. (NYSE symbol: PFE) is a diversified manufacturer of pharmaceuticals and consumer products. Among its brand name pharmaceutical products is Norvasc for hypertension and Zoloff for depression. The latest addition is Viagra, a pill for erectile dysfunction. For 1999, revenues rose to $16.2 billion, up 20 percent from $13.54 billion for 1998. Net income edged lower, to $3.18 billion, or 82 cents a share, from $3.35 billion, or 85 cents a share for 1998. All data is adjusted for the 3-for-1 stock split issued on June 30, 1999. Recently, Warner-Lambert agreed to be acquired by Pfizer, Inc. The shareholders will receive 2.75 shares of Pfizer stock for each share of Warner-Lambert stock. The deal is valued at $85 billion. After the merger is completed, Pfizer, Inc., will become a pharmaceutical behemoth with extensive R & D department. The long-term outlook for the Company is excellent. On October 31, this stock closed at $43.19 per share. Buy this stock on dips and hold long-term. Xerox Corporation (NYSE symbol: XRX) is the worlds largest maker of copier equipment, digital monochrome and color publishing equipment. The Company sells its products and provides services in more than 170 countries. For the year of 1998, revenues rose to $19.4 billion, and 62 percent came from service, supplies, financing, and other recurring revenues. The company’s annual report states that $100 invested in Xerox stock at the end of 1990 grew to $1,266 by the end of 1998. Although the stock is trading at a low P/E ratio, due to the severe downgrade of Company’s debt rating all two hundred shares were sold at $8.19 on October 30 (read: Sold). Back to Top |
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Sold Although we have stated in Octobers’ section of Investing that there will be no changes in our Model Portfolio unless one of the stocks reaches our sell target level, due to the excellent buying opportunities we made a few trades. On October 30, two hundred shares of Xerox Corporation (NYSE symbol: XRX) were sold at $8.19 per share. These 200 shares were bought on December 16, 1999 at $22.13 per share, with an intention to sell 100 shares as soon as the stock reaches $60 per share and hold the remaining 100 shares long-term. Recently, the Company’s debt rating has been downgraded severely, therefore we have decided to cut losses and sell this stock while it still has some value. Although this behemoth of a corporation may be turned around to profitability, there is a slight chance that this Company could file for bankruptcy. If such an event were to occur, it is best to get $8.19 per share right now and use the cash proceeds to acquire another stock. (On October 30, cash received from this transaction was used toward buy order for 200 shares of Internet Capital Group listed below). Our Model Portfolio was heavily overweight in the stock of Intel Corporation. This stock has been one of the best performers in the Model Portfolio, but on August 31, 2000 this stock alone accounted for 25% of the total value of the portfolio. A decision was made to cut our exposure to this equity and use the proceeds to buy 200 shares of Advanced Micro Devices and 200 shares of Lucent Technologies. On October 30, two hundred shares of Intel Corporation were sold at $44.63 per share. Bought On October 30, two hundred shares of Internet Capital Group (NASDAQ symbol: ICGE) were bought at $11.63 per share. Internet Capital Group is a venture capital group that already owns stake in 50 Internet companies. This venture capital group owns a stake in Vertical Net, a group of online trading communities where transactions for parts and raw materials are made among corporations. Just three months ago, in July this stock traded at $45.18 per share and then proceeded to fall. On October 18, this stock reached an intra-day low of $9 per share, down from its 52-week high of $212 per share. In our opinion this stock is oversold and at this level is a screaming buy. There is a slight probability that this stock could revisit its 52-week high of $212 per share. We will monitor this stock closely. As soon as this stock reaches approximately $150 per share, one hundred and fifty shares will be sold immediately and the remaining fifty shares will be held long-term. On the same day, October 30, two hundred shares of Advanced Micro Devices, Inc., (NYSE symbol: AMD) were bought at $20.50 per share. In our opinion this stock could reach approximately $85 per share during the first half of 2001. As soon as this stock reaches our target level, one hundred and fifty shares will be sold and the remaining fifty shares will be held long-term. To find out more about AMD read the section: Stocks for traders. The last stock bought on October 30, was Lucent Technologies, Inc. (NYSE symbol: LU). Two hundred shares of LU were bought at $20.75 per share. Due to the negative outlook for this sector, this stock was oversold and reached ridiculously low level. When this stock closed at $30.50 per share on September 29, we rated it a screaming long-term buy. Then, this stock fell to even lower level in October and we have decided to seize the opportunity and buy more shares. Now there is a total of 250 shares of Lucent Technologies in our Model Portfolio. This stock is for patient investors who are willing to wait two years for the stock to reach $80 per share. As soon as this stock reaches our target level, one hundred and fifty shares will be sold and the remaining 100 shares will be held long-term. Back to Top |
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Model Portfolio Chart 10-31-2000
a) The quantity of shares was adjusted for a 100% stock dividend issued by Intel Corporation on June 22, 1995, a 2-for-1 stock split issued on July 14, 1997, a 2-for-1 stock split issued on April 11, 1999 and a 2-for-1 stock split issued on July 30, 2000. (There were 480 shares of INTC on October 29, 2000. On October 30, 2000, two hundred shares were sold and now there are 280 shares). b) The quantity of shares was adjusted for a 100% stock dividend issued by PepsiCo, Inc. on June 3rd, 1996. c) The quantity of shares was adjusted for a 100% stock dividend issued by Applied Materials, Inc. on October 14, 1997 and a 2-for-1 stock split issued on March 16, 2000. d) The quantity of ADR’s was adjusted for a 2-for-1 split issued by Nokia Corporation on April 16, 1998, a 2-for-1 split issued on April 11, 1999, and a 4-for-1 split issued on April 10, 2000. e) The quantity of ADR’s was adjusted for a 2-for-1 split issued by Ericsson Telephone on May 22, 1998, and a 4-for-1 split issued on May 8, 2000. g) The quantity of shares was adjusted for a 2-for-1 stock split issued by Merck & Co. Inc. on February 17,1999. h) The quantity of shares was adjusted for a 2-for-1 stock split issued by Microsoft Corporation on March 26, 1999. i) The quantity of shares was adjusted for a 3-for-1 stock split issued by Pfizer on June 30, 1999. j) The quantity of shares was adjusted for a 2-for-1 stock split issued by Cisco Systems, Inc. on March 23, 2000. Between April 1994 and July 1998, a total of $28,336 of cash was invested in the Model Portfolio. Due to the excellent performance of the technology stocks, over the course of six years the total value of the portfolio has risen to $145,374 as of June 30, 2000. Our Model Portfolio has generated a gain of $117,038, or 413 percent in just six years. Investors who are just starting out should not be deterred by the size of our Model Portfolio. Notice that a total of $28,336 was invested over the course of four years, averaging an investment of $7,000 per year. Investors who are just starting out could invest as little as $2,000 each year, but be consistent and invest that amount every year. After several years, investor could have a portfolio consisting of several blue-chip stocks. Back to Top |