08/15/2003 12:00 am EST
The markets don't stop when the advisory community takes a "vacation". Indeed, a number of speakers sent reports and updates to their followers while visiting Atlantic City--keeping their readers current regarding the show as well as general market activity. Here's some advice from John Murphy, Mike Norman, Tobin Smith, and Douglas Hughes. (For more info, click on their photos below.)
"During The Money Show, the Wall Street community showed little interest in gold; from a contrary standpoint, this is positive," notes John Murphy, chief technical analyst at stockcharts.com. "The monthly chart of Freeport McMoran Copper & Gold (FCX NYSE) is impressive, with the stock trading at the highest levels in more than five years. That looks like a bull market to me. FCX is getting a double boost--one from gold and one from copper. Both are rising. The recent bullish breakout in silver prices to a three-year high is also giving a boost to the metals sector and silver stocks are beginning to shine. Hecla Mining (HL NYSE) has broken through the highs of the past two years to achieve a bullish breakout. Apex Silver Mines (SIL ASE) appears close to doing the same. We'd also note that there has been a big rise in volume during the recent surge in both silver stocks. That's a good sign."
"Financial assets will also continue to appreciate as capital costs come down," says Mike Norman, in the Economic Contrarian. "Profits are rising again, capital is plentiful and interest rates are still relatively low, the government and the Fed are both accommodating and the dollar is competitively priced. When rates rise some more, buy bonds again. Invest in stocks that pay dividends. Check out these high-yielding convertible preferred stocks: Electronic Data Preferred I (EDS-I NYSE); Six Flags Preferred B Income Piers (PKS-B NYSE); American Electric Power Preferred A Equity Units (AEP-A NYSE); TXU Preferred D Capital Income Prides (TXU-D NYSE); Capital One Financial Preferred C (COF-C NYSE); and CenturyTel Preferred A 6.875% UTS (CTL-A NYSE). All of these issues have very nice yields as well as the potential for appreciation."
"Greetings from Atlantic City!," says Tobin Smith, editor of ChangeWave Investing, in an e-mail to his readers. "I'm going to add Annaly Mortgage (NLY NASDAQ) back to the income list. NLY keeps two-thirds of its portfolio in adjustable or floating-rate assets, which will benefit from the economic recovery we project. As longer-term interest rates keep rising and short-term rates remain stable, this is the gold standard of mortgage REITs. Buy NLY under $20 with a $30 target. By the way, RAIT Investment Trust (RAS NYSE) is a buy, too. They got caught in the mortgage REIT sell-off and don't deserve it. They make apartment and business property loans and their refinance/repayment risk is very low. Take advantage of this sell-off to get the juicy yield. The sellers have no idea what they are doing."
"CNB Bancorp (CNBI NASDAQ) has seven City National Bank and Trust locations in upstate New York," says Douglas Hughes, editor of banknewsletter.com, which was ranked by SIE as the top-performing newsletter portfolio for 2002. "The bank’s total assets are near $400 million. The cash dividend and their earnings seem to always go up, with a current yield around 2.5%. The bank continues to buy back stock even at higher prices than these over the past few years, showing they are committed to the shareholders. They have a 5% buyback plan in place now. Is it time for them to sell? We think so, and a price of $36-$38 would be more than fair in a deal. Accumulate under $27 and buy all you can under $25.50. Their book value is almost $17.50 a share. Downside should be limited to around $24 a share."