October 2000
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Contents Back Issues March 2000 April 2000 May 2000 June 2000 July 2000 Aug. 2000 Sept. 2000 Investing Buy & Sell Stocks for traders Model Portfolio Sold Bought Model Portfolio Update Model Portfolio Chart |
Oil prices continued to rise and reached a ten-year high. Although some analysts expected that the price of oil would fall after summer, the opposite had happened. Furthermore, after reaching a ten-year high, the price of oil remained firm. Due to low inventories and rising demand, the price of oil could remain high for (continued in: Investing). AT & T Corporation was divided into regional phone companies sixteen and half years ago. Now we are seeing a total reversal of that event. In 1998, SBC Communications acquired Ameritech Corporation for $56 billion in stock. The merger created a behemoth that controls 32 percent of phone lines in the United States. Baby Bells continue to face increased competition (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. Advanced Micro Devices (NYSE symbol: AMD) manufactures microprocessors, flash memory devices, data communications products and network products. AMD and Intel continue their fierce competition. Although the demand for microprocessors continued to grow (continued in: Stocks for traders). 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. (continued in: Model Portfolio). |
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Investing Oil prices continued to rise and reached a ten-year high. Although some analysts expected that the price of oil would fall after summer, the opposite had happened. Furthermore, after reaching a ten-year high, the price of oil remained firm. Due to low inventories and rising demand, the price of oil could remain high for a few months. We have stated in August section of Investing “Furthermore, another negative event such as price of oil rising again above $30 per barrel, even temporarily, could cause the Dow and the NASDAQ to test their low levels again. During such a scenario, many stocks could reach low levels and this in turn would provide an excellent buying opportunity for speculators. Investors and speculators should review their portfolios. Sell some of your losing stocks and some of your gainers. Generate some cash and be prepared. If there were a correction, buy a few large-cap stocks and hold these short-term, for a probable gain of 50 percent, or higher.” The high price of crude oil caught everyone by surprise. Although we did consider that the price could rise above $30 a barrel, we expected that after a week, or two, the price would fall. This has not happened and it could affect the course of U.S. economy. Although it is not likely that high price of oil will halt the expansionary cycle, or throw our economy into recession, it could slow this 9-year expansion to a more manageable level. After U.S. government announced that it will release a total of 30 million barrels of oil from the nations strategic reserves, the price of oil proceeded to fall and on September 25, dropped $1.11 to $31.57 a barrel. On September 29, oil closed at $30.83 a barrel. In our opinion, if oil prices remain high for several months, Federal Reserve Board could start lowering rates as early as in May 2001, to prevent the economy from severe contraction. On September 1, the Dow Jones Industrial average stood at 11238.78. The index proceeded to fall and on September 29, closed at a low level of 10650.92, down 587.86 points, or 5.2 percent. Throughout the month, NASDAQ fell a whopping 561.51 points and closed at 3672.82 on September 29, down 13.3 percent. Last month, we 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. Both of these stocks are featured in this month’s section; Stocks for traders. Our Model Portfolio is heavily weighed in tech stocks and due to the recent correction in this sector total value of the portfolio fell. On September 29, total value of the Model Portfolio was 21 percent lower than the value stated on August 31. In September, 200 shares of Sara Lee were sold and 200 shares of Albertson’s, Inc., were bought and added to our Model Portfolio. After these two trades, there will be no changes in our Model Portfolio unless one of the stocks reaches our sell target level. Once again, we remind investors that they should remain calm during this time of the year. Although the market could remain volatile throughout October, it could start to bounce back in November and during the following five months some of the tech stocks could revisit their 52-week high. We will continue to monitor a group of tech stocks and as soon as these reach a low level, we will add them to our list of Stocks for traders. In our opinion, tech stocks will continue to outperform other sectors. After reaching low levels in October, some of the tech stocks could reverse their down trend and ascend to the levels approaching previous 52-week high. Select tech stocks could reward speculators with short-term gains as high as 300 percent. We maintain our bullish outlook on the market. This month the latest prices are listed in decimals. In the future, all of the stock prices will be listed in decimals. Back to Top |
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Buy & Sell AT & T Corporation was divided into regional phone companies sixteen and half years ago. Now we are seeing a total reversal of that event. In 1998, SBC Communications acquired Ameritech Corporation for $56 billion in stock. The merger created a behemoth that controls 32 percent of phone lines in the United States. Baby Bells continue to face increased competition from the upstart phone companies that have build networks from the scratch using the latest technology. These newcomers charge as little as 5 cents per minute for a long distance call and still make a profit. Among these upstarts is Qwest Communications, Level 3 Communications and The Williams Cos. Baby Bells can take care of the competitors either by acquiring them, or by building their own high-tech networks from the scratch. While the market in the U.S. has reached saturation point, there is room for growth in the international markets where individuals eagerly await for a reliable and moderately priced phone service. Regional telecommunications Companies continue to expand in these markets either through mergers, or by acquiring stake in companies overseas. Majority of stocks in this sector have been in a downward trend for over six months and could have reached a bottom. Although long-term prospects for the companies in this sector are excellent, investors have to be very selective. AT&T Corp. (NYSE symbol: T) is the worlds major communications company serving over 90 million customers. The company has the largest long distance network. AT&T provides local telephone service, long distance, wireless and Internet access. The Company plans to provide phone service through cable lines. There are 3,770 million shares outstanding. In 1998, AT&T’s Chief Executive C. Michael Armstrong initiated a plan to shrink overhead from 29% to 22% and that would save $3 billion in annual costs. In the meantime, Michael Armstrong continued his buying spree and AT&T acquired another cable TV operator Media One Group Inc., for $60 billion. In the meantime, the stock continued to descend. Although the stock retested its intermediate high and closed at $60 5/16 per share on March 27, 2000, it once again resumed its downward trend and closed at a low of $29 15/16 per share on August 8, 2000. This stock has revisited the same low level that it reached back in 1997. Recently, AT&T proceeded to aggressively roll out high speed Internet access through its cable lines. In addition, the Company could also offer other services through cable and that would substantially increase revenues. In our opinion, this stock has already tested its bottom and could slowly proceed in the upward direction. There is a strong probability that this stock could revisit its previous high level of mid 60’s during the next two years. On September 29, this stock closed at $29.38 and patient investors could start to accumulate it (price $29.38, annual dividend $0.88, yield 3.0%, and P/E 15). British Telecommunications plc (NYSE symbol: BTY) is a major global telecommunications provider with main headquarters in United Kingdom. The Company is organized into two main operations: BT UK and BT Worldwide. In United Kingdom, Internet usage accounts for approximately 20% of network traffic. Furthermore, data communications such as e-mail, electronic commerce, and the Internet traffic are all growing more than 30% annually. Already, data has overtaken voice communications over British Telecommunications network. In United Kingdom the market for mobile communications is growing 20% annually. The Company has approximately 140,000 employees. For the fiscal 2000 ended in March, revenues rose to $29.8 billion, while earnings edged lower to $5.27 per ADR, versus revenues of $27.6 billion and earnings of $7.38 per ADR for fiscal 1999. Between September 1997 and December 1999 these ADR’s almost quadrupled to $244 ¾ per ADR on December 30, 1999. Since then these ADR’s proceeded to descent and reached a 52-week low of $114 5/8 on September 12, 2000. The Company continues to expand worldwide through joint ventures and through acquisitions. In 1993 BT created Concert Communications Services to serve multinational customers. This division provides global services for approximately 5,000 customers in over 50 countries. In our opinion, British Telecommunications will remain a major global player. The Company could make acquisitions in the United States to expand its worldwide market share. As the demand for wireless communications and the transmission of data continues to grow, the earnings of this behemoth could start to improve and these timely ADR’s could double in value during the next two years. Although it could take several months until these ADR’s start to ascend, patient investors could start to slowly accumulate these and hold at least two years. On September 29, these ADR’s closed at $107.06 (price $107.06, annual dividend $3.71, yield 3.5 %, and P/E 65). CFW Communications Co. (NASDAQ symbol: CFWC) provides service for business and residential customers throughout Virginia and West Virginia. The Company operates the largest PCS network in the region. Furthermore, the Company is a major Internet service provider (ISP) in the region. In addition, the Company provides local telephone, long distance, paging and cable. There are 13 million shares outstanding. The revenues rose to $73.79 million for 1999, from $66.68 million for 1998. Net income edged lower to $6.493 million, or $0.50 a share, versus $8.5 million, or $0.65 a share for 1998. The Company continues to expand through internal growth and through acquisitions. In 1999, CFW Communications acquired Net Access, which added 13,600 Internet subscribers in Southwest Virginia and eastern Tennessee. Furthermore, the Company acquired Cornerstone Networks, Inc. which added 9,000 Internet subscribers throughout central and southern Virginia. The Company continues to expand at a very fast pace and in just two years has added 43,000 Digital PCS subscribers, and in just one year, over 5,800 business telephone lines. CFW Communications had 450 route miles of fiber optic network and plans to complete an additional 500 route miles of fiber this year. After the completion of this project, the Company will have fiber connection to all of the major cities it serves. CFW’s customers can access Internet through a local dial-up connection. Customers who prefer speedier access can choose a Digital Subscriber Line (DSL) service. By the end of 1999, the Company was providing Internet access to 46,000 customers, and the customer base continued to grow in high double-digits. Although long-term outlook for the Company is excellent, due to its small size and the small quantity of shares outstanding its stock could be more volatile than shares of large-cap telecommunications providers. This stock closed at a high of $46 per share on July 14, 2000 and since then continued to descend. On September 13, this stock closed at $32 per share and could be near its bottom. The risk of owning this stock is above average, therefore it could be bought by speculators. This timely stock could revisit its previous high during next year, thus rewarding speculators with a short-term gain of approximately 40 percent. On September 29, this stock closed at $27 (price $27, annual dividend $0.46, yield 1.7%, and P/E 83). Visit the Company’s Web site at www.cfw.com WorldCom Inc. (NASDAQ symbol: WCOM) is the second largest long distance provider. The Company also offers local phone service, electronic mail, and Internet access. On September 14, 1998, WorldCom merged with MCI Communications Corporation. After the completion of the merger, the Company has one of the world’s largest digital networks. WorldCom has a 19.26 percent interest in Embratel, a national communications provider in Brazil. The Company continues to expand its network in Europe and already has over 1,000 miles of local fiber and over 1,800 of long distance route miles. The Company continues to expand through internal growth and through acquisitions. On January 31, 1998, the Company acquired Compu Serve Corporation, an Internet Service Provider. WorldCom has already achieved the scale to provide a variety of services in a global market. The global telecommunications market could reach $1 trillion this year and WCOM has only 4% share of the market. As the Company expands its presence worldwide, annual revenues and earnings could continue to grow in double digits. In the future, the Company could become of the major worldwide telecommunications providers that will offer bundled services over global networks. On November 18, 1999, this stock closed at $60 ¼ per share. WorldCom split its stock 3-for-2 on December 31, 1999. Since then, the stock has been in a downtrend and closed at $29.94 on September 8, 2000. On September 29, this stock closed at $30.38 per share and could be near its bottom. There is a strong probability that this stock could revisit its 52-week high during the next ten months and provide speculators with a short-term gain of 100 percent (price $30.38, annual dividend nil, and P/E 18). Rogers Wireless (NYSE symbol: RCN) is a wireless telecommunications provider in Canada. The Company has a Digital PCS network, and also provides messaging and wireless data services in Canada. Furthermore, through partnership with AT&T Corp. and other roaming partners this service extends to include coverage of 95 percent of U.S. population. As of December 31, 1999, the Company had over 2.1 million Digital PCS subscribers and over 452,000 messaging subscribers. There are 104 million shares outstanding. For the year of 1999, revenues rose to $1.352 billion from $1.243 billion for 1998. The Company reported a loss of $39.4 million, or $0.38 a share for 1999, versus a loss of $78.6 million, or $2.03 a share for 1998. During 1999, the Company continued to expand its network and capital expenditures totaled $401 million, an increase of $99.7 million from 1998. A total of 83 new cell sites were added to expand the coverage area of its cellular network. The Company plans to spend $450 million on capital expenditures during 2000 and approximately 69 percent will be appropriated toward network development. Rogers Wireless strengthened its global alliances in 1999. AT&T and British Telecommunications plc acquired a 33 percent stake in the Company. Through this partnership, the Company will achieve economy of scale that will allow it to buy telecommunications equipment and handsets at lower prices. The Company used the proceeds received from equity sale to reduce debt. Afterwards, the Company’s total long-term debt fell to $1.41 billion from $2.24 billion in 1998 and the average interest rate on long-term debt is 8.4 percent. In the first quarter of 1999, RCN traded as low as $12 ½ per share. Then, the stock proceeded to build a strong upward momentum and closed at a high of $52 5/8 per share on February 8, 2000. Since then, the stock proceeded to descent and closed at $29 5/16 per share on August 15, 2000. Ever since AT&T Corporation and British Telecommunications plc acquired a stake in the Company the long-term outlook is better than ever. With the backing of these two behemoths, the Company could continue to expand at a very fast pace and its base of wireless customers could continue to grow 30 percent annually. Short-term, this stock could continue its downward trend and if it were to fall to approximately $25 per share, investors could start to accumulate it. Afterwards, this timely stock has potential to revisit its recent 52-week high during the next 10 months, thus rewarding investors with a gain of approximately 100 percent (on September 29, this stock closed at $30.38, annual dividend nil, and P/E n/m). SBC Communications Inc. (NYSE symbol: SBC) provides telecommunication services in 7 of the top 10 U.S. markets. The Company has equity interest in telecommunication providers in 23 countries located in Europe, Asia, Latin America and Africa. SBC Communications has approximately 205,000 employees. The revenues rose to $49.489 billion for 1999, up from $46.207 billion for 1998. Net income rose to $8.159 billion, or $2.36 a share, versus $7.690 billion, or $2.23 a share for 1998. After the acquisitions made in 1999, SBC Communications became the second-largest U.S. wireless company. Through an agreement with Prodigy, the Company became the nations third largest Internet service provider. SBC Communications plans to invest $6 billion to build a broadband network capable of delivering high-speed Internet access. More customers demand Digital Subscriber Line (DSL) broadband service. By the end of 2000, the Company plans to establish DSL network capable of servicing 16 million customers. The deployment of these DSL lines could generate more than $3.5 billion in additional annual revenue by 2004. As the competition for customers grows, SBC Communications plans to maintain its leadership position by bundling services that would meet the needs of customers, from basic local service, to a total package of local, wireless, high speed Internet access, satellite TV, and pending regulatory approval, long-distance service. By becoming one-stop, full service telecommunications provider, SBC could earn consumers entire communications and entertainment budget that we estimate could average approximately $150 a month per customer. The Company continues to improve its profit margin. Synergies from the acquisition of Ameritech Corporation and other cost cutting could contribute an additional $3 billion to earnings by the end of 2004. SBC plans to achieve annual earnings growth of at least 15 percent starting in 2001. The stock closed at $54 ¾ per share on December 7, 1999. Afterwards, the stock reversed its upward trend and closed at a low of $39 ½ per share on August 17, 2000. In our opinion, as the growth of earnings accelerates in 2001, the stock could become one of the better performers in this sector. On September 29, this stock closed at $50 per share. Patient investors could start to accumulate this timely stock and hold it long-term. (price $50, annual dividend $1.02, yield 2.0%, and P/E 26). Visit the Company’s Web site at www.sbc.com 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% on some of these stocks. Advanced Micro Devices (NYSE symbol: AMD) manufactures microprocessors, flash memory devices, data communications products and network products. AMD and Intel continue their fierce competition. Although 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. It will be difficult for AMD to maintain this market share because Intel Corporation proceeded to expand its manufacturing capacity and could lower the price of its processors to regain lost 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 5/8 per share on June 21, 2000 (after the recent 2-for-1 split this high was adjusted to $47 5/16). Before the Company issued the split, the stock was already in a downtrend. Since sales of processors are usually the lowest during summer, in our opinion this stock could continue its intermediate 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 5/8 per share. During September this stock proceeded to descent and broke through our initial target level of $24 per share. On September 21, this stock fell 5.75 to $23.81 per share. This stock closed at $23.63 per share on September 29, 2000. Due to the major sell-off of the stock of Intel Corporation, the stock of Advanced Micro Devices could continue its downward trend and fall below $20 per share. There is a probability that this stock could briefly test $18 level in October and then slowly proceed in the upward direction. Speculators could start to buy this stock and if it were to fall to a lower level, average down. 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. 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 5/8 per share. Although there is a slight probability that this stock could fall briefly to $23 per share, speculators could start to buy it now. This stock could reach approximately $90 per share during 2001. 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 $27.94 per share on September 29, and we rate it a strong buy. Unisys Corporation (NYSE symbol: UIS) is a major provider of customer services and information services. The Company makes network servers and software. After going through three consecutive years of losses, the Company finally turned profitable in fiscal 1998. For 1998, the Company reported earnings of $1.06 a share, versus a loss of $4.70 a share for fiscal 1997. When Lawrence A. Weinbach was elected CEO in 1997, he proceeded to make major changes. His initial plan was to cut $1 billion of debt from the Company’s balance sheet. The Company has achieved this goal and the long-term debt fell to $1.2 billion by December of 1998, down from the previous high level of $2.3 billion in 1996. This action alone could reduce the Company’s annual interest expense by more than $110 million. 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 52-week high of $49 11/16 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 9/16 per share on July 27, down 80 percent from its 52-week high. 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 $10 per share, or 100 percent, during the next two months. On the other hand, patient investors could buy this stock now and hold until it revisits its previous 52-week high of $49 11/16 per share. 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 52-week 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 13/16 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 3/8 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 $18 per share in October, or beginning of November. This timely stock is trading at a low P/E multiple. On September 29, this timely stock closed at $11.25 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 7/16 in January 2000, the stock proceeded to descend and closed at $24 13/16 on July 31, 2000. On September 7, this stock closed at $32 9/16 and then proceeded to fall. The stock retested its low of $25 on September 21, and then closed at $25 5/16 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 nine months. This stock was added to our list of: Stocks for traders, in August 2000. On September 29, this timely stock closed at $25.31 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. Maxtor Corporation has tremendously improved its financial position, and as of January 1, 2000, total stockholders equity stood at $255.3 million, versus a deficit of $327.5 million for fiscal 1996. At the end of the year, the Company had $353.9 million of cash and marketable securities, versus $227.6 million in the previous year. This stock reached a high of $21 ¼ in January of 1999. Afterwards, due to the oversupply of disk drives and price competition, the stock proceeded in the downward direction and fell to a low level of $4 15/16 on August 12, 1999. This stock closed at $6 1/16 per share on November 30, 1999, and we started recommending it to speculators in December. At that time we stated that this stock could reach $15 per share. After reaching an intra-day high of $8 5/16 on January 27, 2000, the stock pulled back and closed at $6 ¼ per share on February 22, 2000. This stock closed at $14 11/16 per share on March 27, 2000 Due to the sell-off in the technology sector, this stock broke through its support level of $10 and closed at $6 11/16 per share on July 26, on a very heavy volume of 11.1 million shares. Throughout the whole month of September, this stock seemed to be stuck in a narrow range and then on September 29, rose 1.63 and closed at $10.50 per share, on a very heavy volume of 19 million shares. If the volume were to remain at a high level, this stock could exceed our target level of $16 per share during the next four months. Once this stock reaches our target level, speculators should sell it immediately. 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 52-week high of $47 1/16 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 9/16 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 $16.43 per share on September 29, near its support level. As the volume continues to grow this stock could reach approximately $21 per share during the next two months. We are downgrading 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. TJX Companies, Inc., plans to open over 150 new stores during the next three years. The Company’s annual report states “_ _ _ we continue to be confident in our ability to grow earnings per share by 15-20%.” The stock reached a 52-week high of $37 per share in April 1999, and then proceeded to fall and closed at $15 per share on March 13, 2000. Afterwards, this stock proceeded to build upward momentum and closed at $22 1/4 on March 31. 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. A few months later, on September 15, this stock closed at $22.63 per share. Afterwards, the stock traded in a very narrow range between $22.63 and $21.25 per share. On September 29, this timely stock closed at $22.50 per share. Speculators should monitor this stock closely during the next two months. Once this stock breaks through $24 per share, it could reach our target level of $27 per share and should be sold. Callaway Golf Company (NYSE symbol: ELY) designs and manufactures premium golf clubs. On April 28, 2000, this stock closed at $16 5/8 per share and at this price level we rated it a strong buy. The stock proceeded to rise and closed at $20 9/16 per share on May 12. Afterwards, this stock proceeded to pull back, and on May 31, closed at $18 1/8 per share, on a very low volume of 209,000 shares. Due to the market sell-off, the stock fell and closed at $12 1/2 on July 31. On September 11, this timely stock closed at $16.25 and then proceeded to trade in a narrow range. During the recent sell-off, this stock edged lower and closed at $15.38 on September 29. As the volume grows this timely stock could reach approximately $20 per share by the end of October. Although this stock could reach our target level of $29 per share during next four months, speculators could sell this stock at $20 and use the proceeds to buy one of the tech-stocks listed in this section. 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 September 29, Quantum HDD closed at $10 while Quantum DSS closed at $15.06 per share. We maintain our buy rating on both stocks. The stock of the Hard Disk Drive division could reach $17 during the next five months and it should be sold immediately at that level. The stock of Storage Systems Group (DSS) proceeded to build a strong upward momentum and 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 7/16 per share on March 7, 2000, after reaching a 52-week high of $63 9/16 in May of 1999. After Bank One announced that James Dimon, formerly of Citigroup Inc., would become its CEO, the stock closed at $34 ¼, up $3 3/8 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 ¾ 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 September 29, this timely stock closed at $38.50 per share. We maintain a buy rating on this stock. This stock could reach our target level of $50 per share during the next ten months. Once this stock reaches our target level, speculators should sell it immediately. Back to Top |
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Model Portfolio 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 three 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 September 29, this stock fell to $59.31 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 1/16 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 9/16 per share. On June 30, this stock closed at $21 15/16 per share and then proceeded to descend. After reaching $19.06 on September 11, this stock proceeded to fall and closed at $16.43 per share on September 29, near its support level. As the volume continues to grow, this stock could reach $21 per share during the next two months. We are downgrading 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 $55.25 per share on September 29, 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 five sites and generate substantial amount of revenues. This stock has a strong potential to gain 500% in five years. On September 29, this stock closed at $27.80 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 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 3/8 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 ¼ in November 1999. On September 29, this stock closed at $1.90 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 seven 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 11/16 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 $30.81 per share on September 29. 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 September 29, ADR’s closed at $14.81. 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 ¼ 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 the stock splits there are 480 shares in the portfolio. At the end of the month this stock proceeded to fall and closed at $41.56 per share on September 29. At this price level we rate this stock a screaming 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 13/16 per share. Afterwards, the stock proceeded to ascend and reached an intra-day high of $75 3/8 per share on March 1, 2000. During the recent correction, the stock tested its bottom again. As the telecommunications providers acquire new equipment, the annual revenues 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. This stock fell to a low level and closed at $30.50 per share on September 29. 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 September 29, this stock closed at $74.43 per share. Buy this stock 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 September 29, this stock closed at $60.31 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 $40 on September29. 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 5/16 per share, on a very heavy volume of 16 million shares. In our opinion, this stock is oversold. On September 29, the stock closed at $7.81 per share. This stock is down 62 percent, from its 52-week high of $23 13/16 per share. The stock is trading at ten times earnings, and at this low level we rate this stock a screaming 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. As some investors take profits in their tech-stocks and switch into old economy stocks, the shares of PepsiCo could proceed in the upward direction. On September 29, this timely stock closed at $46 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 September 29, this stock closed at $44.93 per share. Buy this stock on dips and hold long-term. Sara Lee Corp. (NYSE symbol: SLE) is an international producer of frozen and fresh baked goods, meats and consumer products. Sara Lee split its stock 2-for-1 on December 21, 1998. Since this stock was added to the Model Portfolio its performance was below average, therefore a decision was made to sell it. On September 22, 2000, two hundred shares of Sara Lee were sold at $20.06 per share (read Sold). 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. The stock is trading at a low P/E ratio, and is down 66 percent from its 52-week high of $63 15/16 per share. One hundred shares of Xerox Corporation will be sold as soon as the stock reaches $60 per share and the remaining 100 shares will be held long-term, at least five years. On July 26 the Company issued earnings for the quarter ended June 30. Earnings were lower than expected and the stock closed at $15 per share, down $3 3/16. On September 29, this stock closed at $15 per share. In our opinion, this blue chip stock is oversold. At the recent price level we rate this stock a strong buy. Investors who already own this stock could add to their position. Back to Top |
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Sold On September 22, 2000, all two hundred shares of Sara Lee Corp. (NYSE symbol: SLE) were sold at $20.06 per share. One hundred shares of Sara Lee Corp., were bought at $22 per share in April 1994. The Company issued a 2-for-1 stock split on December 21, 1998 and after the split there were 200 shares in the Model Portfolio. This was one of the worst performers in our Model Portfolio. After six long years this stock has appreciated just 100 percent. The stock averaged a compounded annual return of 12 percent. Although the stock of Sara Lee could continue to ascend, but if it were to appreciate at such a slow pace now is the best time to switch. Bought On September 22, proceeds received from the trade listed above were used to buy 200 shares of Albertson’s, Inc. (NYSE symbol: ABS) at $20.75 per share. Albertson’s 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 7/8 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. As soon as this stock reaches our target level of $36 per share, these 200 shares will be sold immediately. After these two trades there is $742 of cash left in the Model Portfolio. Model Portfolio Update Intel Corporation warned that due to a slow-down of computer sales in Europe the growth of revenues in the third quarter would be lower than expected. On September 22, the stock fell $13.55 and closed at $47.94 per share, on tremendously heavy volume of 307 million shares. After Intel issued its’ warning, several analysts proceeded to downgrade the stock. We have stated on numerous occasions that sales in this sector are seasonal. The sales fall during summer and then start to rise in September. Typically, demand reaches the highest level by December. The long-term outlook for the company is very good, although no one knows if the stock will continue to perform as well as it did during the past five years. Since 30 shares were bought in March of 1995, at $78.25 per share, after four stock splits, now there are 480 shares in the Model Portfolio. Although this stock fell and closed at a low level of $41.56 per share on September 29, during the past five years it gained 750 percent. We will continue to hold this timely stock long-term. Do not sell this stock at this level! During the month of October, Intel could fall briefly to approximately $38 per share. Investors who do not have this stock in their portfolio should buy it now. While Intel Corporation is building additional manufacturing facilities; it still generates several billion dollars of net cash flow each year. While worldwide demand for microprocessors declined slightly, it is still growing approximately 17 percent annually. Although this stock could be volatile in the short-term, the long-term outlook for the company is excellent and the stock should be held at least five years. Back to Top |
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Model Portfolio Chart 9-29-2000
Cash $742
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. 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 |