2/25/08

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.). What’s wrong with the Farm Bill:

http://mjperry.blogspot.com/2008/02/top-ten-reasons-farm-bill-is-bad.html

Politics

Domestic

International War Against Radical Islam

Sadr extends cease fire:

http://www.longwarjournal.org/archives/2008/02/report_sadr_to_exten.php

The Market

Technical

Where the short interest is concentrated:

http://bespokeinvest.typepad.com/bespoke/2008/02/etfs-with-the-h.html

Fundamental

Aggressive Growth Buy List

Company Close 2/22 Buy Value Range

Accenture Ltd $34.03 $32-36

American Eagle Outfit 22.12 22-25

Amphenol 37.87 35-40

Best Buy 44.22 42-48

Fastenal Inc 41.90 36-41

Microsoft 27.68 26-30

SAP Inc 48.05 46-54

Sun Hydraulics 21.49 21-25

Subscriber Alert

The stock price of Quest Diagnostic has fallen below the lower boundary of its Buy Value Range. Accordingly, it is being Removed from the Aggressive Growth Buy List. While the price remains well above its Stop Loss Price, it nonetheless also traded below its January low--not a good sign. On the Market open this morning, the Aggressive Growth Portfolio will Sell one half of its position in DGX.

News on Stocks in Our Portfolios

Northern Trust (Dividend Growth Portfolio) announced that it was setting up a $229 million reserve against losses that mutual funds it advises might take related to their ownership of sub prime paper. In other words, if all the sub prime paper these funds own

is worth $0, the bank would lose $229 million. The reserve equals about 25% of one year’s earnings and 4% of the bank’s equity.

Company Highlight

Sun Hydraulics designs and manufacturers screw-in hydraulic cartridge valves and manifolds which control force, speed and motion as integral components in fluid power systems worldwide. Its products are used in construction, agricultural, industrial and utility equipment. The company has achieved a 20%+ return over the last three years as well as generating earnings and dividend growth in excess of 25% over the last five years. SNHY should be able to continue to expand its business as it increases its marketing penetration into the industrial base of the emerging growth countries. Value Line rates this company B+, it has no debt and its stock yields approximately 1.8%.

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

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