Want To Play Oversold Names? Here's A Few
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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2:23 (Dow Jones) Another thought from Lehman's Jeff deGraaf. The best way to
play an oversold rally in stocks is to play the most oversold stocks. He
doesn't necessarily recommend it - you have to make right calls on when to
buy and when to sell. That said, he compiled a list of the most oversold
issues with above average betas and short interest/day's-to-cover ratios
greater than three days. Among those on the list: RCN Corp. (RCNC), Brio
Tech (BRIO), WebEx Communications (WEBX), Click Commerce (CKCM), and
Wireless Facilities (WFII). (TG)
2:05 (Dow Jones) Bank of Tokyo-Mitsubishi reckons that chain-store sales
registered a modest 2.8% increase for stores open a year on a year-over-year
basis. Seasonally adjusted, BTM estimates that sales slid by 0.6% Jan.-Feb.
after rising 3.0% Dec.-Jan. (JM)
1:58 (Dow Jones) UBS PaineWebber analyst Geoffrey Harris downgraded Biogen
(BGEN) to hold from buy and lowered earnings estimates for 2001 to $1.87 a
share from $1.93 and for 2002 to $2.11 from $2.43. He believes Biogen's
prospects depend on sales of multiple sclerosis drug Avonex and launch of
psoriasis treatment Amevive. While Amevive may achieve blockbuster status,
"it is unlikely to do so in time to offset the slowdown in Avonex sales
resulting from the loss of orphan drug status (in 2003). Consequently,
Biogen ... will be hard-pressed to achieve any real revenue or earnings
momentum in the next several years," he said. Shares fell 3.3%. (BMM)
1:51 (Dow Jones) Credit Suisse First Boston's chief strategist Tom Galvin
still sees S&P 500 rising to 1520 this year, about a 20% increase, but
shifts holdings a bit. He adds consumer cyclicals to the overweight list
while removing financials. Remains overweight in health care, technology and
communication services. (KJT)
1:45 (Dow Jones) Express Scripts (ESRX) skidded 11% after an analyst raised
concerns about the company's "quality of earnings" due to increased
capitalization of software expenses. In 2000, Express Scripts' capitalized
software costs rose to $37 million from $16 million, according to a 10K
filing. This jump raises a flag about the quality of earnings, says U.S.
Bancorp Piper Jaffray analyst Daren C. Marhula in a note. (When a company
capitalizes an expense, it is amortized over time and shows up on the
balance sheet, rather than the income statement. This benefits reported
income.) (KLC)
1:30 (Dow Jones) Spencer Clarke is out with a list of 10 names it believes
will outperform the market over the next year: Veritas (VRTS), Openwave
Systems (OPWV), Flextronics (FLEX), Sylvan Learning (SLVN), Gemstar-TV Guide
(GMST), Fuelcell Energy (FCEL), Electronic Data (EDS), Calpine Corp. (CPN),
TMP Worldwide (TMPW), and Quest Diagnostics (DGX). Firm says investors
should focus on high-quality growth stocks with strong market positions and
favorable business outlooks. Makes sense. (TG)
1:18 (Dow Jones) Not all Democrats are "trigger" happy. House Minority
Leader Richard Gephardt, D-Mo., says tying tax cuts to budget surpluses
through a trigger mechanism is a very bad idea. "I think triggers are
wrong-headed and a cop-out," Gephardt said. A group of moderate senators and
some moderate House lawmakers are pushing for a trigger in Bush's $1.6
trillion tax cut. (MHA)
1:11 (Dow Jones) Shares of Costco Wholesale Corp. (COST) rose 6% on heavy
volume on news of February same-store sales growth. The cash and carry
membership warehouse retailer reported February same-store sales rose 5%.
Robinson-Humphrey analyst David Schick said the February figure is a "good
number." (CAL)
1:03 (Dow Jones) Brinker International (EAT) shares up 7% on
better-than-expected February sales at its flagship Chili's casual-dining
restaurants. John Ivankoe, who tracks the industry for J.P. Morgan Chase,
says the month's results give "investors a fairly clean look at business
trends . . . and are indicative of results to come." He rates Brinker a
long-term buy, despite negative numbers at On The Border, its Mexican chain,
which is in a fix-it mode. (RLG)
12:52 (Dow Jones) Intel Corp.'s (INTC) out-of-the-money call options
continue to trade heavily across the various options exchanges, with
investors selling calls that expire in further months and buying stock. Such
covered call writing is cautiously bullish. Some investors likely think that
any recovery in tech stocks will first be seen in chips, since other tech
players will need to order chips to make everything from computers to
telecom equipment. Intel stock is up 38 cents to $33.31, as tech stocks lost
ground. Intel's April 35, July 37.50 and October 37.50 calls all traded more
than 10,000 contracts Thursday morning. (KXT)
12:50 (Dow Jones) News that the FDA was cancelling its scheduled review of
Genentech's (DNA) asthma and allergic rhinitis drug Xolair took the wind out
of investors, who sold off the shares Thursday. Analysts said investors are
concerned that the drug's planned launch in the latter portion of this year
may be delayed. Genentech recently down 5%. (SPJ)
12:39 (Dow Jones) Despite a lack of news about Hotjobs.com (HOTJ), shares of
the online job-search company are up 28% at $6.38. Analyst Kelly Flynn at
UBS Warburg said it appears investors are realizing the stock's recent
levels were close to the company's cash position, which translates to about
$2.70 a share. "It was only a matter of time before investors realized it
was a good buy," Flynn said. (RS)
12:32 (Dow Jones) National Semiconductor Corp.'s (NSM) fiscal 3Q earnings of
27 cents a share, excluding a charge, handily beat Wall Street's reduced
expectations. But the company warned that 4Q earnings could be in the three
to five cent range. A First Call/Thomson Financial survey of analysts
produced an estimate of 23 cents a share for the quarter. National
preannounced in early February for its 3Q, because of slower customer orders
and bloated inventories in the cellular and PC markets. The company will
hold a conference call Thursday at 1:00 p.m. ET. (DLF)
12:29 (Dow Jones) Eli Lilly & Co. (LLY) may be the second pharmaceutical
company to receive a warning from the Food and Drug Administration in the
past few weeks, but the reactions couldn't be more different. The warning
letter citing quality control and validation flaws observed during a routine
inspection at Lilly's Indiananpolis plant didn't even draw a twinge of
fright from Wall Street. Schering-Plough (SGP) got whacked pretty good after
the FDA went through a couple of its plants. Lilly shares flat at $76.50.
(BMM)
(END) DOW JONES NEWS 03-08-01
02:24 PM
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