June 26, 2007

Economics

Politics

Domestic

International War Against Radical Islam

Iranian troops in Iraq:

http://www.breitbart.com/article.php?id=070625232254.etwt6z5u&show_article=1

The Market

Technical

After a spectacular start, the DJIA remained below 13400. We’ll give it another day or so to trade back above 13400 before we write it off as a support level. But we are now watching 13266 on the DJIA and 1490 on the S&P for indications of direction.

Fundamental

Thanks to the federal government’s (1) munificent agricultural policy, subsidies abound and (2) enlightened energy policy, taxpayers, directly and indirectly, are paying $100 a barrel for ethanol instead of the price gouging $68 a barrel foisted upon us by the greedy oligopolistic oil companies. Combined it means that farmers are scrambling for every square inch they can get a plow in; and further it means that sales of chemicals for crop protection and management should continue at an above average pace.

Last week, the Aggressive Growth Portfolio bought American Vanguard Corp (AVD), a diversified specialty and agricultural products company. Its products include insecticides, fungicides, growth regulators and soil fumigants for corn and cotton. Last year, earnings were negatively impacted as farmers shifted acreage from cotton to corn, causing inventory problems in the company’s cotton insecticide; and the stock got whacked. However, the company has a fine record of profit growth, averaging 20%+ annually over the last 10 years; this should continue as the demand from the corn market continues to grow. AVD is also expected to make acquisitions that will contribute to profit increases.

EPS: 2006 $.57, 2007 $.75, 2008 $.90; DVD: $.07, YLD .5%

http://finance.yahoo.com/q?s=AVD

And to help make the point, a review of the farm bill:

http://www.latimes.com/news/opinion/la-ed-farmbill25jun25,0,1804096.story?coll=la-opinion-leftrail

News on Stocks in Our Portfolios

Market Analysis

More Cash in Investors’ Hands

Iberdola is acquiring Energy East for $4.5 billion in cash

June 25, 2007

Economics

Your tax dollars at work:

protectionism (Free trade is a major positive for world and US economic growth.)

http://www.washingtonpost.com/wp-dyn/content/article/2007/06/21/AR2007062101866_pf.html

a rising tax and regulatory burden (Government has never proven that it could solve economic problems efficiently or satisfactorily.)

http://www.washingtonpost.com/wp-dyn/content/article/2007/06/21/AR2007062101026.html?hpid%3Dtopnews&sub=AR

But it is not all bad news:

fiscal profligacy (Government spending as a percent of GDP is too high and the looming explosion in entitlement expenditures will make it worse. There is no good solution save spending discipline.).

http://www.clubforgrowth.org/2007/06/house_gop_delivers_veto_pledge.php

Sort of (3 votes in the House last week on reducing spending):

http://www.clubforgrowth.org/2007/06/good_proposals_bad_outcomes.php

Politics

Domestic

International War Against Radical Islam

If your local news source hasn’t mentioned Arrowhead Ripper, you should read this:

http://www.ibdeditorials.com/IBDArticles.aspx?id=267405225211303

The Market

Technical

Fundamental

News on Stocks in Our Portfolios

Medtronic (Aggressive Growth Portfolio) is raising its quarterly dividend from $.11 to $.125 and announced the buy back of an additional 50 million shares of stock.

EPS: 2006 $2.41, 2007 $2.70, 2008 $3.05; DVD: $.47, YLD .09%

http://finance.yahoo.com/q?s=MDT

A positive write up on Factset Research (Aggressive Growth Portfolio):

http://www.zacks.com/rank/zcommentary/?id=5287

Eli Lilly (Dividend Growth Portfolio) reported positive results in trials for its diabetes drug:

http://www.thestreet.com/_htmlbtb/newsanalysis/pharmaceuticals/10364501.html

Walgreen (Aggressive Growth Portfolio) reported third fiscal quarter earnings per share of $.56 versus estimates of $.54 and $.46 recorded in the comparable period in 2006.

EPS: 2006 $1.72, 2007 $2.05, 2008 $2.35; DVD: $.31, YLD .07%

http://finance.yahoo.com/q?s=WAG

Market Analysis

More Cash in Investors’ Hands

Nucor is buying Magnatrax for $280 million in cash.