A Combo: New Technology & Old Stalwart

11/17/2006 12:00 am EST

Focus:

Louis Navellier

Editor, Blue Chip Growth and Emerging Growth

Seeking opportunities in many sectors and among a wide variety of market caps, veteran investor Louis Navellier finds interesting investment potential in his latest offering to subscribers, with a blend of the new and old.

"DIRECTV Group Inc. (DTV NYSE) is a big deal in my home state of Nevada, where we like to refer to the satellite dish as our "state flower." The company takes television directly to the masses. Known as Hughes Electronics until 2004, DIRECTV is the largest US direct broadcast satellite (DBS) provider, ahead of EchoStar Communications' DISH Network. DIRECTV provides service to more than 15 million customers in the US and more than 1.5 million customers through its Latin America segment. To focus better on the direct-to-home satellite business, the company underwent substantial restructuring in 2004 and 2005 and sold all other operations and investment holdings. News Corporation, through its Fox Entertainment Group, holds a 38% stake in DIRECTV.

"DIRECTV's next move is to expand its delivery of HD programming. Now that HD television is becoming much more common, the cable TV and satellite business is booming. DIRECTV is a favorite of most sports enthusiasts, because they can watch all the major NFL and other sporting events in HD. As HD programming continues to expand, DIRECTV will likely be the biggest winner. The stock has been appreciating steadily and is a great buy.

"J.C. Penney (JCP : NYSE) is one of the largest department store, catalog and e-commerce retailers in the US. In 2004, the company sold its Eckerd drugstore chain to the Jean Coutu Group and CVS for $4.5 billion in cash. The retailer runs more than 1,000 J.C. Penney department stores throughout the US and Puerto Rico.

"The company recently announced that its sales rose faster than expected in late August and September, and it raised its third-quarter and full-year estimates for profits in 2006. J.C. Penney said its third-quarter operating earnings would equal $1.26 per share, up 4 cents per share from its earlier forecast. The company also raised its full-year 2006 estimate to $4.61 per share, up from $4.57 per share. The analyst community expected $1.09 per share in the third quarter and $4.60 per share for the full year.

"J.C. Penney recently said it would open 20 stores in October. It also plans to open 150 new and relocated stores in the 2007 to 2009 period. Chairman and Chief Executive Myron E. Ullman III called it J.C. Penney's most aggressive store-opening campaign in more than 25 years. J.C. Penney has carved itself a great niche for its price-sensitive customers and is a great buy for us."

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