9/28/07

Economics

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.). In the interest of being fair and balanced:

http://thehill.com/business--lobby/pork-barrel-scrutiny-leading-to-fewer-national-earmarks-2007-09-26.html

Politics

Domestic

I have been attempting to avoid political commentary, but this editorial on Ahmadinejab’s Columbia University speech as it relates to academic freedom and free speech is too good a read:

http://author.nationalreview.com/latest/?q=MjE5NQ==

International War Against Radical Islam

I have said this repeatedly: the Saudis are not our friends:

http://ibdeditorial.com/IBDArticles.aspx?id=275697948158759

The Market

Technical

Fundamental

I mentioned Johnson and Johnson yesterday as a high quality company but one whose stock has lagged in the bifurcated Market in which we find ourselves. Another name I really like in the healthcare area is Abbott Labs.

Abbott Laboratories is a manufacturer of drugs, diagnostic tests, intravenous solutions, laboratory and hospital instruments, prepared infant formulas and nutritional products. The company has several new drugs in its pipeline which should allow it to continue its historical 10-11% annual earnings and dividend growth. Indeed, growth in pharmaceutical sales this year have jumped dramatically as a result of its new drug, Humira, used for the treatment of rheumatoid arthritis, psoriatic arthritis and Cronins’ disease. Abbott earns 25% return on equity and has a debt to equity ratio of only 21%.

EPS: 2006 $2.52, 2007 $2.82, 2008 $3.25; DVD: $1.30 YLD 2.5%

Buy Value Range: $51-57, Stop Loss: $43.46, Sell Half Range: $89-94

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

News on Stocks in Our Portfolios

A positive write up on Emerson Electric (Dividend Growth Portfolio):

http://www.zacks.com/rank/zcommentary/?id=5997

Rocky Mountain Chocolate Factory (Aggressive Growth Portfolio) announced an increase in its quarterly dividend per share to $.10 versus the prior $.095. This is the second dividend increase this year.

EPS: 2006 $.75, 2007 $.95, 2008 $1.10; DVD: $.34 YLD 2.4%

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

More Cash in Investors’ Hands