Friday Oct 06, 2006

After the Dow the dollar may be next to turn higher

Taipah Group's Dynamic Market Alert

-- After the Dow, the dollar may be next to turn higher
-- Adding Armor
-- Taipan Portfolio Update
----------------------------

The most lucrative Chinese energy partnership in over a decade could net you 1084% almost overnight! 

Once a simple piece of government legislation is approved, one $1.50 Australian company will quickly become one of the world’s largest suppliers of energy to China’s 1.3 billion citizens.  For early investors who get in before the law is passed, this company could hand you a quick quadruple digit gain and send you into an early retirement!  For all the details on this historic energy deal, please read on...

--------------------------

After the Dow, the dollar may be next to turn higher

by J. Christoph Amberger

For the last couple of months, we have called for a bull market in U.S. blue chips. Finally, after three historic high closes in succession, it looks like there may indeed be a cautious bovine nudging open the pasture gate.

For an even longer period, I have been predicting a turnaround in the U.S. dollar. And after yet another three months in the doghouse, it looks like there’s finally some movement in the greenback.

The U.S. dollar rose 1% against the yen... little enough, that’s true, but the most since July 12. The greenback touched 119.10 yen, the highest since March 13. Earlier, it reached $1.2573 against the euro, the strongest since $1.2560 on July 26.

Despite the ever-more apparent freeze of U.S. interest rates, the dollar still is yielding almost twice the rate as the euro... not to mention the yen, which still yields next to nothing.

While Democrats and gold bugs are still painting apocalyptic visions for the immediate future of the U.S. economy, the numbers support just the opposite. The U.S. jobless rate fell to 4.6%, according to the Labor Department.

(This, by the way, is also known as “full employment” -- and considered the holy grail of European labor politicians.)

Average hourly earnings rose 0.2% for a second month, today’s report showed. Earnings increased 4% from September 2005, matching the biggest gain in five years.

Increased earnings, in combination with lower energy costs due to the trend reversal in oil and gas prices, spell pent-up spending pressure for consumers. Which in turn translates into a great Christmas retail season, GDP growth and further bullish momentum for the U.S. stock market.

Adding Armor

by Steven Lord

I never cease to be amazed at Wall Street’s myopia. I suppose our instant-gratification, drive-by society guarantees that any disappointment results in a violent sell-off, but I can’t help but wonder why Wall Street consistently votes with its feet instead of thinking with its head. For trend-based investors like myself, this results in the baby being thrown out with the proverbial bathwater on an equally consistent basis. In my book, this can often mean opportunity.

Examples of this tendency are never hard to find, but this past week a company I have followed for the better part of four years had its turn. Armor Holdings (AH) is one of the premier armor companies in the country, playing a key role in protecting personnel, aircraft and vehicles from ballistic threats (RPGs, IEDs, etc.). As you can imagine, the last couple of years have been stellar for the firm, as the need for expanded armor has become painfully obvious to anyone watching the evening news. The stock went from $17 at this time in 2003 to a high of $64 in May of this year, nearly quadrupling sales in the process. But the combination of defense-budget uncertainty and small-cap underperformance has since pushed the stock down to the low $50s over the summer, and it had clawed its way back to roughly $60 by the start of the week.

Then AH reduced current-quarter guidance some 18%, to 55-65 cents per share versus the 75-80 cents per share Wall Street had been expecting. Boom! The Street jumped first and looked later, selling the stock down over eight points.

But calmer reflection reveals that AH’s miss is related to the timing of contract shipments, not a loss or lack of business. Revenue associated with supplemental programs, specifically for M1114 up-armored Humvees as well as certain soldier equipment programs, are expected to ship in the fourth quarter of fiscal 2006 and in fiscal 2007, instead of the current quarter. Sales are not lower than expected; they are just not when expected -- a big difference in my book. The company also noted some $900 million in new contract awards so far in the third quarter, more than it did in all of 2004. Consensus earnings estimates call for $3.60 per share this year and a whopping $5.10 in 2007 -- or 41% growth.

This type of thing is a common but frustrating aspect of trend-based investing. Short-term reactions, driven by the ready-fire-aim mentality on Wall Street, can pummel promising long-term opportunities. But activity like this can also put such opportunities on the bargain table for alert investors, and AH has a very promising future: No jeep, truck, tanker or soldier now enters a combat zone without state-of-the-art armor anymore, and the fiscal 2007 bridge supplemental budget for the Defense Department included $1.6 billion for up-armored Humvees and $794 million for medium trucks. And did I mention AH is the sole provider of armor for medium trucks, and one of only two providers of the armor kits for Humvees?

Taipan Portfolio Update

Here is the complete list of sells for all Taipan services this week. 
Sell Recommendations (in order by sell recommendation date)

That’s how we roll here at Taipan Group. If you want these kinds of gains every week, find out more about the best deal we’ve ever offered.
Just click here...

----------------------------

Earnings Announcements Tuesday, October 10, 2006

Emmis Communications, JB Hunt Transport Services Inc, Supervalu, Alcoa Inc, and Genentech Inc are releasing earnings.

Brought to you by http://www.AmericanCapitalist.net

Unlock Dates for October 2006

Wendy’s will distribute its remaining 82.75% stake in Tim Hortons Inc on September 29, 2006.  When these shares flood the market, look for THI to drop.  THI has a PE of 19 as compared to a company like McDonald’s, which trades with a PE of 16, is much cheaper, and has more growth.

10/3/06 – Visicu Inc is unlocking 6 million shares.
10/3/06 – Castle Brands Inc is unlocking 3.5 million shares.
10/4/06 – Sealy Corporation is unlocking 28 million shares.
10/23/06 – Corel Corporation is unlocking 6.5 million shares.
10/31/06 – Delek US Holdings is unlocking 10 million shares.

Brought to you by http://www.vixtrader.com

Upgrades and Downgrades

Build-A-Bear Workshop upgraded by Susquehanna Financial from Neutral to Positive.

El Paso upgraded by Citigroup from Hold to Buy.

Macrovision upgraded by Piper Jaffray from Market Perform to Outperform.

Newmont Mining upgraded by Matrix Research from Hold to Buy.

Stamps.com upgraded by Matrix Research from Hold to Buy.

Aeropostale downgraded by Citigroup from Buy to Hold.

Allstate downgraded by Friedman Billings from Outperform to Market Perform.

American Eagle downgraded by Citigroup from Hold to Sell.

Ameritrade downgraded by Banc of America from Buy to Neutral.

Dollar Tree downgraded by Friedman Billings from Outperform to Market Perform.

Nike downgraded by Matrix Research from Strong Buy to Buy.

Brought to you by http://www.gressor.com

Quote of the Day:

“When China, one of the world’s most corrupt countries, starts dishing out tens of billions of US dollars in aid and business contracts in Africa, the world’s most corrupt continent, alarm bells go off in Washington and other Western capitals.”

- Kent Ewing, October 6, 2006

P.S.  The most dangerous partnership in Big Oil since Exxon Mobil is now open for business. And you can get in on the action. Invest in this unknown Texas company and crush the S&P 500 by 403% over the next four months -- guaranteed!

Click here to learn more...