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PRIME
STOCK NEWSLETTER FOR October 28th, 2008 |
(If you do not see today's edition, please hit the refresh button) |
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 $0.375 above the
purchase price and moved higher as the position
moves higher. |
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Today's Comments:
The overall market moved moderately lower yesterday in a broad based move that saw the majority of the sector indices I track move lower. The weakest sectors on the day were the Airlines, Insurance, Commodities, Gold/Silver, Broker?Dealer, Oil & Gas, Biotech, Disk Drive Manufacturers, Cyclicals, Internet, High Tech, and the Transports. The only sector index I track that moved higher on the day was the Semiconductor index that barely inched higher. The overall trend of the market continues to look lower. The Bottom Line: The overall market should move lower.
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Sterling
Calendar for October 28th, 2008 |
Economic
& Earnings Calendar |
Date |
Est.
Time |
Release |
For |
Briefing.com |
Consensus |
Prior |
10/28 |
10:00am |
Consumer Confidence |
Oct. |
52.0 |
52.0 |
59.8 |
10/29 |
8:30am |
Durable Orders |
Sep. |
(1.0%) |
(1.0%) |
(4.5%) |
10/29 |
10:35am |
Crude Inventories |
10/25 |
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10/29 |
2:15pm |
FOMC Policy Statement |
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Date: |
Comments: |
10/27 |
Hercules 'HPC' announces earnings after the close. Est. $0.39 |
10/28 |
Apollo Group 'APOL' announces earnings after the close. Est. $0.67 |
10/28 |
Earthlink 'ELNK' announces earnings before the open. Est. $0.40 |
10/28 |
Fiserv 'FISV' announces earnings after the close. Est. $0.83 |
10/28 |
Kansas City Southern 'KSU' announces earnings before the open. Est. $0.60 |
10/28 |
Occidental Petroleum 'OXY' announces earnings before the open. Est. $2.71 |
10/28 |
US. Steel 'X' announces earnings. Time N/A. Est. $7.08 |
10/28 |
Valero Energy 'VLO' announces earnings. Time N/A. Est. $1.38 |
10/29 |
:Legg Mason 'LM' announces earnings before the open. Est. $0.09 |
10/29 |
Newmont Mining Corp. 'NEM' announces earnings before the open. Est. $0.44 |
10/29 |
Office Depot 'ODP' announces earnings. Time N/A. Est. $0.08 |
The
full earnings calendar for this
week can be found (here) |
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Recommendation: Sell/Short
Humana, Inc. 'HUM' |
Company: Humana, Inc. |
Symbol: 'HUM' |
Closing
Price: $30.80 |
Web: www.humana.com |
YH: $88.10
YL: $29.01 |
EPS: $4.91 P/E: 6 |
Shares
Outstanding: 169 Million |
Forecasted
EPS:.$5.85 |
Market Cap.:
$5 Billion |
Dividend: N/A |
Yield: N/A |
Aver.
Daily Trading Volume: 2.5 Million Shares |
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Price Targets: $28.90, and then $24.82 |
Upside Stop: $31.77/share |
Options Rec.: November $30 Puts @ $2.30/contract |
Options
Symbol: HUM WF |
Additional
information on Humana, Inc. "HUM'' can be found (here) |
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Company Description: Humana, Inc. provides various health and supplemental benefit plans for employer groups, government benefit programs, and individuals in the United States. It operates in two segments, Government and Commercial. The Government segment includes beneficiaries of government benefit programs. These programs include Medicare, a federal program that provides hospital and medical insurance benefits to persons of age 65 and over, and some disabled persons under the age of 65; Military Services that comprises its TRICARE South Region contract, which provide health insurance coverage to the dependents of active duty military personnel and to retired military personnel and their dependents; and Medicaid, a federal program that facilitate the delivery of health care services primarily to low-income residents. The Commercial segment consists of members enrolled in its medical and specialty products marketed to employer groups and individuals. Its products comprise smart plans and other consumer products, such as Health Maintenance Organization (HMO) products that provide prepaid health insurance coverage to its members through a network of independent primary care physicians, specialty physicians, and other health care providers; Preferred Provider Organization (PPO) products, which are offered primarily to employer groups and individuals; and Administrative Services Only (ASO) products to employers who self-insure their employee health plans. This segment also provides various specialty products, including dental, vision, and other supplemental products. As of December 31, 2007, Humana had approximately 11.5 million members in medical benefit programs and approximately 6.8 million members in specialty product programs. The company was founded in 1964 and is headquartered in Louisville, Kentucky..
Chart updates daily |
A
full list of the news headlines
for Humana, Inc."HUM" can
be found (here) |
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Our Analysis: The shares of Humana, Inc. "HUM' set a new multi-year closing low yesterday on heavier than normal trading volume. This is a very bearish trading signal. The shares of 'HUM' should continue to move lower and test $$28$28.90/share, the point from which they gapped higher on the open of trading on December 14th of 2004. If the shares of 'HUM' close below that level, as I expect they will, then they should continue to move lower and test $24.82/share, the point from which they gapped higher on the open of trading on December 1st, 2004. Support is rather weak at both of those price levels, and real support does not come into play until around $20.25/share, which is where I think the shares of 'HUM' are ultimately headed. I see upside resistance on the shares of 'HUM' @ $31.37/share, and have set my stops accordingly at $31.77/share. |
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Stocks
Looking Higher |
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Stocks Looking Lower |
GE, MSFT, CSCO, ORCL, PBR, FCX, WMT, AA, RIMM, HPQ, HAL, CVS, POT, YHOO, SLB, COP, VLO, KO, LOW, MET, X, DD, OXY, WAG, BP, SU, MON, UTX, APA, NE |
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Yesterday's
Edition of the Prime Stock Newsletter |
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Sterling Investment Services may hold positions
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consulting services to the companies mentioned
within this report. |
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