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INVESTools Advisory
A Free Digest of Trusted Investment Advice To unsubscribe from this free newsletter, please see below. In This Issue: 1. Hot Market, Consistent Earnings for Microcap (NEOG) 2. Government Small Pox Deal a Boon for Biotech Firm (BREL) 3. Zacks: Time to Buy Equities (AZO) 4. Seven Supersafe Stocks for Capital Gains in 2002 (MYL) *************** A Word from our Sponsor ******************* ALERT: New Buy Sign from Dan Sullivan on 16 High-Return Stocks Buy signs from Dan Sullivan's The Chartist are few and far between. And on-the-money for 30+ years - if you buy what he buys. His 12/5/01 buy sign is a rare chance to join one of the country's premier stock pickers. FREE trial: http://www.investools.com/c/go/CHRT/MTXTH-chrtTN2?s=S602 ******************************************************* INVESTools Advisory Compiled by John Brobst, INVESTools.com 1. Hot Market, Consistent Earnings for Microcap (NEOG) Jonathan Steinberg says Wall Street's spotlight may soon shine on Neogen (NEOG). Earnings consistency (21 consecutive profitable quarters) and heightened interest in protecting the nation's food supply pushed shares of Neogen (NEOG) to all-time highs in November 2001. Steinberg notes that this move boosted the firm's market cap to over $100 million. "Now that it crossed that threshold, it is likely to appear on the radar screens of small-cap managers," he says. Neogen develops and markets products and services for food and animal safety; the recent shift in public attention to the safety of basic infrastructure, such as food supply, seems a readymade opportunity for Neogen, Steinberg says. In fiscal 2001, sales boomed 44% for its diagnostic test kits that detect foodborne bacteria and other toxins. The firm grew its operating income by $1.9 million without incurring comparable hikes in expenses, and margins rose 12.2% as a result. Steinberg sees annual sales growing from today's $35 million to over $600 million in short order, and he predicts EPS will rise 26% to $0.68 in 2002. A growing number of health- conscious consumers and a more security-conscious government will lead to even greater demand for Neogen's products, he says. Steinberg advises buying today and anticipates a share price of $36 by early 2003. For more on Jonathan Steinberg's advice see "This Month's Recommendation," January 2002, Individual Investor's Special Situations Report. Jonathan Steinberg provides one undervalued stock per month poised for substantial growth and profit. For a free 30-day trial go to: http://www.investools.com/c/go/SPEC/MTXTH-spec010302 ---------------------------------------------------------- 2. Government Small Pox Deal a Boon for Biotech Firm (BREL) A huge contract to help supply the US government with 200 million doses of small pox vaccine caused a surge in shares of Bioreliance (BREL). Buy signs soon came from growth stock guru Jim Collins (OTC Insight) and his former pupil Louis Navellier (MPT Review). That in turn prompted newsletter watcher Gregory Spear to add shares to his Security Portfolio of stocks expected to benefit from higher spending on security and safety. Bioreliance provides contract manufacturing and testing services to biotech and pharmaceutical companies. The firm is a major subcontractor to Acambis and Baxter, who test and develop the vaccine for the government. Shares of Bioreliance more than doubled since September 11 and are now consolidating near their all-time highs. Spear is excited at how Q3 net income grew 500% on a 29% increase in revenues compared to the year-ago quarter. "Look for a dip and then stash some shares away. It's a great buy- and-hold candidate," he says. For more on Gregory Spear's advice see "The View From The Letters," December 24, 2001, The Spear Report. Consensus stock picks from the best performing advisory services in the US today. For a free 30-day trial go to: http://www.investools.com/c/go/DENT/MTXTH-dent010302?s=S600 ----------------------------------------------------------- 3. Zacks: Time to Buy Equities (AZO) Ben Zacks is bullish for the first time in over 2-1/2 years. "We are decidedly more bullish about the market than we were just two weeks ago. It is time to start aggressively putting money to work," he says. He predicts a surge in corporate profits during H1 2002 as today's recession forced companies to cut costs and layoff staff. Stock prices are rallying despite poor earnings reports, and that tells Zacks that earnings should grow substantially next year. One stock Zacks recommends buying is Autozone (AZO). The nation's #1 auto parts chain sells parts, maintenance items and accessories through over 3,000 stores in 42 states. The firm's board of directors just approved a $250 million stock repurchase bringing its recent total to $1.45 billion. Autozone's sales and earnings momentum are compelling, and Wall Street analysts see this growth accelerating. Same- store sales grew an impressive 9% in Q1, and EPS of $0.76 zoomed past the consensus analyst estimates of $0.60. Shares now trade at 23x the current year's estimate of $3.13 and 20x next year's estimate of $3.75. "A good entry point for new investors is $70," Zacks says. For more on Ben Zacks' advice see "Timely Buys of the Month," Mid-December 2001, Zacks Advisor. Ben Zacks uses earnings estimate revisions from analysts at brokerages to select stocks likely to outperform the market over the next 12 months. For a free 30-day trial go to: http://www.investools.com/c/go/ZAKS/MTXTH-zaks010302?s=S600 ---------------------------------------------------------- 4. Seven Supersafe Stocks for Capital Gains in 2002 (MYL) The major market averages have rallied on expectations of a rebound in the economy and earnings. But Rich Moroney is not convinced. He says the time-tested Dow Theory has not yet confirmed that the current upturn is anything but a bear market rally. "Our bottom-line advice: maintain 33% of equity portfolios in short-term reserves. Avoid richly valued tech stocks, and consider small and mid-sized companies in your search for reasonably valued growth stocks." he says. Moroney offers seven stocks he calls "2002 capital gains favorites," and one of these is Mylan Laboratories (MYL). The firm sells 140 generic and branded drugs. Wall Street sees revenues growing from $846 million this year to $931 million next year and then to $1 billion the following year. A long slate of patent expirations at big drug companies should drive Mylan's revenues for years to come, Moroney says. Meanwhile, Mylan is growing its own product pipeline of new drugs, and those should bolster profit margins significantly. In fact, management sees 50% of all revenues coming from branded drugs soon. Mylan handily beat estimates for the last three quarters, and Moroney sees new drugs leading to positive earnings surprises. "The stock is being upgraded to 'buy,'" he says. For more on Rich Moroney's advice see "Featured Report," December 24, 2001, Dow Theory Forecasts. Rich Moroney uses the time-tested Dow Theory to provide stock picks and portfolios and to keep investors on the right side of major market trends. For a free 30-day trial go to: http://www.investools.com/c/go/DOWA/MTXTH-dowa010302?s=S602 *************** A Word from our Sponsor ******************* Tech Buyback Portfolio Posts Stellar Gains: +39.23% YTD! David Fried knows a stock is undervalued when the company buys back its shares. That's how he earned 39.23% YTD in techs while the benchmark Nasdaq fell 21.82%. 'Buy these 5 techs today,' Fried says. Get them with a FREE trial: http://www.investools.com/c/go/BACK/MTXTH-backTX2 ******************************************************* Disclaimer The INVESTools Advisory is published solely for informational purposes and does not solicit nor offer to buy or sell any stock, mutual fund or other security. It does not attempt or claim to be a complete description of the securities, markets, or developments referred to in the material. All expressions of opinion are subject to change without notice. The information is obtained from internal and external sources which INVESTools considers reliable, but INVESTools has not independently verified such information and INVESTools does not guarantee that it is accurate or complete. INVESTools does not undertake to advise anyone. INVESTools, its employees, and/or officers and directors, may from time to time have a position in the securities mentioned and may sell or buy such securities. 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