It was mentioned on Stockhouse so I guess it also deserve a post over here. JDX got a write up in WhisperStocks last week. In case nobody knows about WhisperStock they are one of the better newsletters out there and are not your normally penny pump sheet. Almost all the stocks they follow are blue chippers and the newsletter costs ~$70/month.
To give you a feel of the quality of the newsletter here is the copy of the entire letter for the day JDX was featured. The other stocks featured are NORTEL NETWORKS, UNITED STATES CELLULAR, NOKIA, POWERWAVE TECHNOLOGIES, and BLOCKBUSTER....all very large and well know stocks and not a single penny on the sheet. JDX is written up at the bottom.
NORTEL NETWORKS: (NT) $68 13/16 Up $1 13/16 and traded on the New York Stock Exchange.... Here's what we said about Nortel Networks on September 29 when the stock was priced at $50..... "Here's one that closed yesterday on its 52 week high on twice its average daily volume. The stock is being accumulated by institutions. With being completely blown out of the ball park on our recent AOL put option pick, let's try to make it up with call options on Nortel Networks. Let's buy the December 50's (NTLJ), which closed yesterday at $4 3/8." Two weeks later on October 13 when Nortel was priced at $58 1/16, here's what we told you......... "The December 50's closed yesterday at $9 3/4 for a gain of 123%. If you missed the December 50's, buy the December 60's (NTLL) which closed yesterday at $4 1/4.....still not much premium for a stock with such bullish trends."
As we've grown accustomed to saying around here....."that was then and this is now." In 30 short days, shares of Nortel have vaulted to $68 13/16 for a gain of gain of 37.62%. However, the Nortel December 50's (NTLJ) are quickly becoming one of our better option recommendations, closing at $19 on Friday for a 30 day gain of 216.67%. The Nortel December 60's (NTLL) aren't to shabby either! On Friday, the December 60's (NTLL) closed at $10 for a three week gain of 135.29%!!! Friday's close was another technical breakout with Nortel closing at a new 52 week high. Our bullish technical indicators are off the charts! The stock is one to own. We'll give option speculators yet another chance to own the call options..... If you missed the first or second set of call options, it's okay to buy the Nortel January 70 Call options (NTAN) now priced at $6.
Nortel leads the industry in high-capacity optical solutions. The company recently broke its own speed and capacity record by debuting Optical Internet capabilities to carry up to 6.4 Terabits per second (Tbps) of Internet and other traffic over a single, hair-thin strand of fiber. "Today we've set a new Internet and networking 'land speed record' using light," said John Roth, president and Chief Executive Officer, Nortel Networks. "This unprecedented technology breakthrough will revolutionize the speed, reliability, quality and economics of the Internet we know today. It will provide the necessary foundation for a new high-performance Internet built on extreme capacity optical networking in the backbone, and integrated optical and packet signaling at the core. This will in turn drive massive discontinuities in every business, creating a new era for communication, collaboration and commerce." Commercial availability of Nortel Networks' scalable 40 to 80 Gbps platform is planned for 2001. The platform will be capable of increasing capacity as high as 6.4 Tbps through Dense-Wavelength Division Multiplexing (D-WDM) technology that combines channels of light into one beam for increased traffic capacity on a single fiber, providing sufficient speed and capacity to reliably connect 2500 backbone routers on a fiber pair.
In an effort to meet blistering market demand, JDS Uniphase Corp (JDSU), the world's No. 1 maker of parts for fiber-optic equipment in phone networks, said last week that it would spend $2.8-billion in stock to buy supplier Optical Coating Laboratory Inc (OCLI). Nortel Networks Corp (NYSE:NT - news). and Lucent Technologies Inc (NYSE:LU - news)., two of JDS Uniphase's largest customers, are experiencing strong demand for optical networks. The markets embraced the deal as JDSU Uniphase (JDSU) was up 20 points on the week; Optical Coaring Laboratory (OCLI) was up 54 points on the week; Nortel Networks (NT) was up 4 points on the week and Lucent Technologies (LU) was up 3 points on the week.
UNITED STATES CELLULAR: (USM) $93 1/16 Up $1 9/16 and traded on the American Stock Exchange....Here's what we told you on October 12, 1999, when US Cellular was priced at $79 9/16..... "Rumor is that several new brokerage house recommendations will hit the street on US Cellular. The stock made a strong technical breakout in a lackluster market yesterday, and you know what we've said in the past about stocks that make it to the $80 level.....there's an excellent likelihood that they will go on to the $100 level. There's very little premium in the Call Options, so let's buy the February 80's (USMBP), which closed yesterday at $6 3/4." Those of you who purchased the February 80's now have gains of 127.78% in three weeks, as the USMBP's closed on Friday at $15 3/8..... With US Cellular, we've got yet another very hot stock on our hands in a very hot sector group. Friday's close was another technical breakout and another 52 week high. The stock is one to own! Option speculators have two choices here. Either roll your profits to another position or double up. The February 90's (USMBR) @ $9 1/2 are appropriate. Try your best to purchase the USMBR's in the $8 range.
US Cellular is a provider of satellite-based wireless communications to rural areas. The company's cellular coverage stretches from Hawaii to Maine, from Florida to Washington. The centerpiece of U.S. Cellular's coverage is a 100,000 square mile patch of the Midwest, a market of almost 9 million people. The company currently has 2.5 million subscribers. USM is bringing small communities into the 21st century, offering satellite positioning and data transmission services. Believe it or not, people in rural America are business people just like people who live in big cities, and these people have long been neglected as it relates to the availability of wireless communication. Wireless telephones have a sophisticated image of users with business suits and laptop computers rather than hay balers with combines. While wireless has reached an estimated 35% of most urban audiences, only 25% of people in rural areas are reached by wireless communication.
Experts predict that wireless penetration in the U.S. is probably going to reach 60% to 70% and it shouldn't vary all that much between rural and urban markets. European wireless markets have climbed into the 50% to 60% range, with some countries reaching as high as 70%. But Europe is a more compact piece of real estate than the U.S. The keys to expanding rural wireless markets in this country are building out your system so you have coverage and making sure that when numbers are dialed, the calls go through! U.S. Cellular runs 2,400 cell sites around the country, covering a population of more than 26 million. Each of those sites carries an industry service grade of PO1 or PO2. That grade means only one or two of every 100 rush-hour cells doesn't go through. That means the cash register is ringing with every one of those calls, and U.S. Cellular's cash register is ringing in a number of ways these days! The company's established structure allows it to add customers with only minimal increases in costs. So while revenue rose 33% in 1998, general and administrative costs rose 31%. Operating income, meanwhile, rose 36%. The company's gross margins rose to 34% in 1998 which was up from 30% the year before. And these results are most impressive when compared to the industry's backdrop of declining prices. U.S. Cellular;s average monthly revenue per customer dropped from $63 in 1996 to $48 in 1998. The company is working to counteract that decline by adding customers and cutting costs. Marketing operations have trimmed the cost per added customer to $317 in 1998 from $332 in 1996.
Another U.S. Cellular cost-cutting tactic has been changing its network over from analog to digital equipment. It is expected that 65% of the company's coverage and service will be digital by the end of this year. An interesting boost in revenue has come from other providers' roaming customers. Low-cost or single-rate national wireless programs from larger providers are proving to be pure manna from the larger markets. With U.S. Cellular serving midsize and rural America, when other companies; customers roam, they're going to us U.S. Cellular. Roamer services accounted for 23% of company revenue in the second quarter, up from 20% a year earlier. U.S. Cellular covers its share of mid-size cities such as Tulsa, Okla.; Tallahassee, Fla.; and Rockford, Ill. The company will be watching the effect of price competition in those markets from growing PCS-type wireless phones. PCS competition in larger urban markets has actually simulated subscriber growth. With this sector one of the hottest sectors on Wall Street, the strength appears here to stay!!
NOKIA CORP: (NOK) $115 7/8 Up 1/4 and traded on the New York Stock Exchange..... Sticking within the same industry group as US Cellular, Nokia has been a good performer and we expect it to continue to perform. We made our first recommendation of Nokia on October 29, 1999 at $110 3/8. The following option positions are still open..... The January 110 Call Options (NAYAB) at $8 5/8, currently priced at $12 1/8 for gains of 40.42%; the January 115's (NAYAC) @ $9 3/8, currently priced at $9 1/8 for a loss of 2.67% and the January 120's (NAYAD) @ $7 1/8, currently priced at $6 7/8 for a loss of 3.51%.
POWERWAVE TECHNOLOGIES: (PWAV) $74 5/8 Up $1 7/8 and traded on the Nasdaq Stock Exchange..... This stock is now up 11 5/8 points since we headlined it in the Whisper Stock section on October 29 telling you..... "We're hearing rumors of positive fundamental developments with Powerwave Technologies. The company makes cellular signal amplifiers that can handle several protocols.Every cellular provider seems to use a different protocol. Telecom companies use Powerwave's devices to expand the capacity and boost the strength of cellular signals. While many stocks have been shaky of late, Powerwave Technologies has seen its share price rise over 15 points in the last 30 days. The company earned 20 cents a share in the second quarter, up 82% from last year. Sales were up 225% to $68.5 million. If we had to guess, the "positive fundamental developments" are probably on the earnings front." Friday's close was yet another 52 week high. The chart points to still higher share prices.
BLOCKBUSTER: (BBI) $16 7/8 Up $1 1/8 and traded on the New York Stock Exchange.... Blockbuster made a huge technical breakout on Friday, closing at a 52 week high of $17 1/8 on 1.5 million shares. Is something up here?? You bet it is!! Viacom recently spun off a 18% stake in its Blockbuster video rental chain. Until the last couple of days, the new IPO had been a bust......that is until last Wednesday when it was announced that Blockbuster was aligning itself with America Online, setting the stage for a possible public offering of its Blockbuster.com unit. America Online is making a $30 million equity investment in Blockbuster.com, a 2-1/2 year old Web site operated by Blockbuster and the two will work on developing high-speed programming. The alliance is the first such partnership for Blockbuster, which intends to look for other technology and telecommunications partners. Overall, Blockbuster's goal is to raise in excess of $100 million in equity for Blockbuster.com, while retaining 90 percent ownership. Last week's deal with AOL has set the stage for other deals and what will likely be a very hot offering in Blockbuster.com. Blockbuster operates 6,500 video rental stores and the company enjoys considerable economies of scale, including a nice deal with Hollywood, in which it gets tapes for a nominal $4 a copy in return for giving the movie studios 45% of its revenue. This deal sure beats the old system, in which the company would pay $60 to $70 apiece for the tapes and risk having a lot of inventory that never left the shelf. The chain, which enjoyed a 13% gain in U.S. same-store revenue last year, plans to add another 3,000 stores in the U.S. and overseas in the next three years. The company is also developing a system that will allow customers to reserve tapes on-line.
JORDEX: (JDX) C$1.04 Up C$.18 cents and traded on the Toronto Stock Exchange..... I am told that this company could soon become one of the hottest junior Internet companies listed on the Toronto Stock Exchange. As with all stocks priced under $5.00 a share, Jordex is a penny stock and you must have a very high tolerance for risk in order to invest in this company. However, with that said, the chart of Jordex does appear to be compelling. Friday's trading session saw the stock trade within 8 cents of its 52 week high which was set last April. A close above the C$1.12 level would be extremely bullish for the stock. In the coming months management has stated its intentions to restructure the company. According to my source, it appears that management is planning on restructuring the company based on a organizational structure similar to that being presently used by companies such as ICGE, CMGI, SFE, idealab!, or Softbank. However the company has stated that if the opportunity presented itself they may opt to use their finances to make a single large investment in one U.S Company. We'll probably have a complete feature story in tomorrow's issue of Market Digest Online. At Friday's close in Canadian dollars, the stock is priced at an equivalent of $.71 cents a share in U.S. currency.
Best Regards
KEITH
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