7/19/07

Economics

protectionism (Free trade is a major positive for world and US economic growth.). Here is a great example of why we are worried about the course of domestic politics:

http://www.american.com/archive/2007/july-0707/2018fast-track2019-to-nowhere

Politics

Domestic

International War Against Radical Islam

We are no supporter of John McCain; but his speech during Tuesday night’s Senate ‘slumber party’ is worth reading:

http://www.plnewsforum.com/index.php/forums/viewthread/20764/

An interview with General Petraeus:

http://hughhewitt.townhall.com/Transcript_Page.aspx?ContentGuid=484182dc-bf7c-42a7-ac74-9e270a9ef0f2

The Market

Technical

Fundamental

As of the close of business yesterday, of the 11% of the S&P 500 reporting second quarter earnings, the average earnings increase is 10%; further, 57% of those reporting have beat profit expectations, 25% have not met expectations and 18% have been in line.

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The stock price of ConocoPhillips ($87- Dividend Growth Portfolio) has risen into its Sell Half Price Range. Accordingly, the Dividend Growth Portfolio is selling 20% (versus 50%) of its position. We know, we know--how many times have we said ‘don’t sell your oil stocks’? Certainly, the recent strength in oil and oil stocks, argues against such a move at this time. But our Price Disciplines were designed for the explicit purpose of forcing us to take counterintuitive investment action at emotional extremes; in other words, to take profits when we are least inclined to do so--and that would be now for the oil stocks. As some sort of pitiful rationalization, the Dividend Growth Portfolio will average out of the other 30% of the stock at higher prices.

EPS: 2006 $9/99, 2007 $8.65, 2008 $8.55; DVD: $1.84, YLD 2.1%

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

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More on the origin of the sub prime problem:

http://bigpicture.typepad.com/comments/2007/07/brief-history-m.html

News on Stocks in Our Portfolios

BBT (Dividend Growth Portfolio) reported second quarter earnings per share of $.83 in line with expectations and versus $.79 reported in the comparable 2006 quarter.

EPS: 2006 $2.81, 2007 $3.30, 2008 $3.55; DVD: $1.68, YLD 4.0%

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

Hershey (Dividend Growth Portfolio) reported second quarter operating earnings per share of $.35 in line with expectations and versus $.42 recorded in the second quarter of 2006

EPS: 2006 $2.34, 2007 $2.55, 2008 $2.75; DVD: $1.15, YLD 2.0%

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

VF Corp (Dividend Growth Portfolio) reported second quarter operating earnings per share of $.93 versus $.88 reported in last year’s second quarter.

EPS: 2006 $4.73, 2007 $5.30, 2008 $6.05; DVD: $2.20, YLD 2.6%

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

HNI Corp (Dividend Growth Portfolio) reported second quarter operating earnings per share of $.56 versus $.56 reported in the comparable quarter in 2006.

EPS: 2006 $2.58, 2007 $2.35, 2008 $2.75; DVD: $.78, YLD 1.9%

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

Illinois Tool Works (Dividend Growth Portfolio) reported second quarter earnings per share of $.90 versus expectations of $.88 and $.81 recorded in last year’s second quarter.

EPS: 2006 $3.01, 2007 $3.35, 2008 $3.70; DVD: $.84, YLD 1.6%

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

Market Analysis

More Cash in Investors’ Hands

Sysco is buying back 20 million shares of stock.