|
|
| PRIME
STOCK NEWSLETTER FOR OCTOBER 12th, 2005 |
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 $0.25 above the
purchase price and moved higher as the position
moves higher. |
|
Today’s Comments: The overall
market finished Tuesday mixed with the Dow Jones
Industrial Average finishing higher while the
NASDAQ and S&P 500 finished the day lower.
The move lower by the market was rather broad
with the weakest sectors on the day being the
Semiconductors, Airlines, Broker/Dealers, Telecom,
Biotech, Internet, Healthcare Providers, Pharmaceuticals,
High Tech, Banking, Insurance Technology, Gold/Silver,
Consumer, Retailer, and Cyclicals indices. There
was strength in the Oil & Gas, Natural Gas,
Interactive, Commodities, and Chemical indices.
The bond market had minor weakness as interest
rates moved slightly higher. I feel like I am
repeating myself as if I am stuck in some sort
of groundhog day; again the majority of the
sector indices look weak and as they will continue
to move lower, and the vast majority of the
heavy volume stocks continue to look weak.
The Bottom Line: The overall market
should move lower.
|
|
Sterling Calendar for
October 12th, 2005
|
| Date |
Est.
Time |
Release |
For |
Briefing.com |
Consensus |
Prior |
| 10/12 |
10:30am |
Crude Inventories |
10/07 |
|
|
(246k) |
| Date: |
Comments: |
| Oct. 12 |
Harley-Davidson 'HDI' announces
earnings before the open. Est. $0.90 |
| Oct. 12 |
Lam Research reports earnings.
Time not disclosed. Est. $0.30 |
| Oct. 12 |
Monsanto Co. 'MON' reports
earnings before the open. Est. ($0.51) |
|
|
Recommendation: Sell/Short
XM Satellite Radio 'XMSR' |
| Company:
XM Satellite Radio Hld. |
Symbol:
'XMSR' |
Closing
Price: $32.42 |
| Web
Site: http://www.xmradio.com |
YH:
$40.89 YL: $26.16 |
Forecasted
EPS: ($1.82) |
| Shares
Outstanding: 222 Million |
EPS:
($2.79) P/E: N/A |
Market
Cap.: $7.2 Billion |
| Price
Targets: $31.16, $27.77, and then
$26.53 |
Upside Stop: $33.18/share |
| Options
Rec.: October $32.50 Puts @ $0.95/contract |
Options
Symbol: QSYVZ |
Company
Description: XM Satellite Radio Holdings,
Inc., a holding company, provides music,
entertainment, and information programming
for reception by vehicle, home, and portable
radios, as well as over the Internet primarily
in the United States. The company offers
XM NavTraffic, which provides satellite
traffic data, and XM WX satellite weather
service that offers graphical data weather
service to the marine and aviation markets.
Its radio services include music genres-commercial
free-and live radio entertainment, popular
musical formats, sports and entertainment
programming, and local traffic and weather
programming, as well as XM Radio Online.
As of December 31, 2004, it operated approximately
150 channels, including 65 commercial-free
music channels; 30 news and talk channels;
31 sports channels; 21 instant traffic
and weather channels; 1 emergency alert
channel; and premium channels serving
3.2 million subscribers. The company markets
its services through various distribution
channels, including automotive manufacturers
and dealers, national and regional electronics
retailers, car audio dealers, and mass
retailers and rental car companies. XM
Satellite is headquartered in Washington,
District Of Columbia. |
|
Our
Analysis: The shares of XM Satellite
Radio Holdings 'XMSR' closed below a key
support level on heavier than normal trading
volume yesterday. The shares of 'XMSR'
reached their peak in late July and have
been trending lower to sideways since
then. They have increased their decline
since the 1st of October. The shares of
'XMSR' should continue to move lower and
test $31.16/share, a point of downside
support established in mid-June of this
year. If the shares of 'XMSR' close below
that level, as I expect they will, then
they should continue to move lower and
test $27.77/share, the point from which
they gapped higher on the open of trading
on May 12th of this year. If the shares
of 'XMSR' close below that level then
they should continue to move lower and
test $26.55/share, a point of downside
support established in late April of this
year. I see upside resistance on the shares
of 'XMSR' at $32.80/share, and have set
my stops accordingly at $33.18/share.
|
|
|
| INDICES |
Dow
Jones Industrial Average (INDU):
Closed @ 10,253.17 Last Signal:
Called lower on October 5th with the previous
day's close of 10,441.11
Current Expectations: I am expecting the Dow
Jones Industrial Average to move lower and test
10,140.12 on a closing basis. |
|
S&P
500 (SPX): Closed @ 1,184.87 Last
Signal: Called lower on October 5th with the
previous day's close of 1,214.47
Current Expectation: I am expecting
the S&P 500 to move lower and test
1,173.80 on a closing basis. |
|
NASDAQ
100 (NDX): Closed @ 1,539.31 Last
Signal: Called lower on October 5th with
the previous day's close of 1,595.54
Current Expectations: I am
expecting the NDX move lower and test 1,533.27
on a closing basis. |
|
CBOE
Ten Yr Treasury Index (TNX): Closed @
4.384% Last Signal: Called higher
after the close of trading on September 12th at
4.169% Current Expectations:
This index should continue to move higher and
test then 4.419% |
|
Stocks
Looking Higher |
GIL, MESA, ADST, RJET, UTIW, MSSR, LSCO, NURO,
ESCL, WMT, MRK, IBM, COP, VLO, JCP
|
|
Stocks Looking Lower |
MSFT,
CSCO, GLW, PFE, BCRX, MOT, TXN, C, ALTR, BRCM,
S, BAC, QCOM, JPM, CVS, GOOG, MXIM, CY, DIS, JNPR,
BLS, KLAC, CFC, ADI, NSM, KO, ABS, GPS, RIMM,
ADBE, AMZN, EXC, COF, XMSR, MRVL, TER, NVDA, MOT,
LLY, NVLS, UNH, LOW |
|
| Yesterday's
Edition of the Prime Stock Newsletter |
The
Sterling Investment series of newsletters is produced
by Sterling Investment Services, Inc. If
you would like to receive a chart on any index
or stock mentioned in this report please contact
us at the below mentioned numbers. We also
offer custom research reports on any stock investment
that you may desire information on. To receive
further information on these services please visit
our web page at: www.sterlinginvestments.com
If you would like to contact us our # is 800-275-6901,
fax # (404)-816-8830 Email address is: enelson@sterlinginvestments.com
Sterling Investment Services may hold positions
in the securities recommended or may be providing
consulting services to the companies mentioned
within this report. |
Copyright
1992-2005 Sterling Investment Services, Inc.
P.O. Box 191767, Atlanta, GA. 31119-1767
Fax 404-816-8830
404-816-8240 |
|
|
| Providing
Investment Banking Consulting Services to Public
Companies |
|
