Prime Stock Advisory Letter for November 24th, 1998

Position Statement: In our Prime Recommendation Letter we attempt to identify the recommendation with the highest probability of moving higher.  We recommend that stop orders be placed at the time of purchase,  and once the position has moved profitable we recommend a stop be placed a minimum of 3/8th above the purchase price and moved higher as the position moves higher.

Today's Comments:  The overall market moved sharply higher yesterday,  with the major market indices setting new closing highs.  This is very bullish for the market in the long run.  In the short term I have some concerns that the market may be slightly over extended and may pullback slighly before continueing higher.  I do also have some concerns that the market has reached a point of high valuation that may be difficult to sustain if corporate earnings do not resume a steady rate of growth.  The activity in the Internet issues continues to be very selective and irrational.  Take the fact that shares of eBay, Inc. 'EBAY' rose almost $50/share yesterday.  This added $2 billion in market cap to the company,  bringing its market capitalization to almost $8 billion dollars.  While eBay is the favorite of the investing public there is a massive discrepency in the valuation being awarded to eBay and that of its competitors who appear to have better more established businesses.  This is just one example of what I percieve as inconsistencies by the market in valuing the stocks within the Internet sector. The Bottom Line:  The overall market should move higher.
 

Company:   Winn-Dixie Stores, Inc.     Symbol: 'WINN'    Closing Price: $39.94/share.
YH: $59.375      YL: $28.625    EPS: $1.11      P/E: 36.2     Forecasted EPS: $1.52
Dividend: $1.02     Yield:  0.25%     Ex Dividend: 2/11/1998
Price Target:  $53.25 & $52.19       Downside Stop:  $38.875
Options Recommendation: December 35 Calls,  Symbol 'WINNLG' @ $5.75/contract.

Company Description: This company operates a major chain of grociery stores.

Recent News:  10/30  WInn-Dixie recalls hot dogs due to possible contamination

Our Analysis: This company is a component of the S&P Retail index 'RLX',  which I have rated as moving higher from its current levels.  The shares of 'WIN' gapped higher on the open of trading yesterday.  In the process they closed above a key upside resistance level on heavier than normal trading volume.  The shares should continue to move higher and test $43.25/share,  the point from which they gapped lower in late July of this year.  If the shares close above that level then they should continue to move higher and test $52.19/share,  a point of upside resistance established in early July of this year. 

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