January
Effect Special Report:
10 Low Priced Stocks With Outstanding
Recovery Prospects
This report offers 10 specially selected
stocks that we have determined offer good recovery prospects during the
currently bullish seasonal period that favors depressed and out of favor
smaller cap stocks. We do not favor chasing already exploited, overvalued
issues such as internet stocks or many tech issues on the basis that
buying high will allow us to sell even higher. While this has been the
ongoing Wall Street game, it is not ours. We wish investors of this type
of strategy well as we remain comfortable with sticking to our own game
plan.
The following issues offer
diversification across a broad number of market sectors. Some of the
characteristics that are appealing to us are that many show insider
accumulation as prices have declined (a vote of confidence by management),
double bottoms with basing &/or reversal characteristics within their
price charts, and bullish divergence’s (marked on charts).
Associated Estates
(AEC), 8 3/4, (REIT) Yield: 17%
Indicators are bullish but slightly
overbought due to recent dividend declaration. Buy dip below 8 � ahead of
the January 14 Dividend Record Date. The REIT Sector analysis that we use
recently turned bullish!
2) Bank One (ONE),
31 �, Down sharply on problems with their credit card operations,
management should have this addressed and recovery prospects based
partially on potential for lower interest rates. Use 28 as a stop/loss
point.
Chart indicators are bullish after
making higher lows against the double bottom of the price & higher
indicator bottoms that offered bullish divergence’s.
Bethlehem Steel (BS), 9
3/16, already up 43% from the low, should continue to benefit from better
steel pricing and recent sanctions imposed on foreign dumping. Buy a dip
below 8 � for a target of 10 � - 11.
Short term Indicators have become
overbought and divergent, suggesting a pull back to at least test the 8 -
8 � breakout point. We would use it for buying.
Eastman Kodak (EK),
62 7/16, one of the "Dogs of the Dow", We think EK offers good
recovery prospects with a target of 80+ with a higher than average 2.80%
dividend yield.
Indicators are mixed, with momentum
bullish and Stochastics and On Balance Volume trying to bottom.
Humana (HUM), 8
� is the largest HMO in the US and shows a pattern of rising bottoms. A
push to 9 � - 10 would confirm the double bottom, and insiders recently
took advantage of the depressed price to load up!
While indicators here too are becoming
modestly extended, they are bullish and allow for further gains. Buy some
now, add to it if it dips!
Kroger (KR) 18 15/16, "Let’s
go Krogering!" Recently slammed on an earnings pre-announcement, this
quality and largest US supermarket chain may be basing for an attempted
recovery.
With short term indicators turned down,
we would prefer not to chase this, but wait for a further retracement of
its recent gains, looking to accumulate if it dips to 17 � and hope for a
resumption of the recovery to at least the 24 � - 25 area of resistance.
olaroid (PRD),
18 �, Its not that we are in love with the photo industry, but Polaroid
insiders have been showing steady accumulation of the stock. It is also in
what we would consider to be in a green zone below 20, where it has
bottomed in the past, and a red zone above 25, where it has topped out.
Try to accumulate below current levels.
Indicators are mixed, from bullish to
neutral, offering opportunity to accumulate with further weakness.
8) Silicon Graphics (SGI), 9
�, provides systems ranging from desktop workstations and servers to
supercomputers, offering advanced computing and 3D visualization. They
also design software for Internet and entertainment applications and
their systems can manipulate 3D models for computer-aided design, as
well as being used as a tool for video editing, animation, technical
publishing, Web Pages and software development. They seem to be in the
right businesses for the day, and offer the prospects for a price
recovery that are required of these recommendations.
