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New Profits In Ferro
The Oxford Short Alert
Thursday, April 28, 2005
By Alexander Green & Louis Basenese
#252
** New Profits In Ferro
Yesterday’s rally – and a recent announcement saying an accounting probe has cleared the company’s top management of wrongdoing – caused Ferro (NYSE: FOE) to rise to $18, triggering our buy stop.
That was good for a double-digit profit.
We’re sitting on another one in Winnebago (NYSE: WGO). When we originally recommended going short, the nation’s leading RV seller was stuck in park.
Sales were slowing, inventories were rising. And gas costs and rising interest rates were scaring prospective buyers. Not much has changed, and our shares have shifted out of park and into reverse. And the company appears headed over the guardrails.
Although Winnebago doesn’t report earnings until June 16, results from a competitor are a good proxy of what to expect. Tuesday’s earnings release from Coachmen Industries (NYSE: COA) was pretty dismal.
Revenues only increased as a result of aggressive incentive programs. Inventories remained high. And operating margins almost disappeared – dropping from an already slim 0.2%.
Although Winnebago is unlikely to report a loss like Coachmen, expect the company to experience the same difficulties. At this point the RV industry is running low on gas and struggling over high prices at the pump. Continue to short Winnebago.
Elsewhere, I’m moving shares of Waters Corp. (NYSE: WAT) to hold. Last month the company slashed its first-quarter earnings targets, and then managed to slightly beat them.
By the company’s own admission, “sales and earnings growth rates for the quarter were weaker than we had anticipated.” And there’s not much optimism about improvements in the short term. If the shares resume their downward trend, I’ll put it back on our active short list.
Each of the other companies listed below is worth shorting at current levels.
If you have any questions, feel free to call one of our VIP Trading Services representatives at 888.570.9830 (toll-free) or e-mail: viptrader@oxfordclub.com, or contact Pillar One Advisor Greg Galloway at 800.438.3040 or 407.667.4729.
Stock
Symbol
Current Price
Comments
Cousins Properties
NYSE: CUZ
$26.56
Sell short. Buy stop is $32.
Waters Corp.
NYSE: WAT
$38.50
Hold. Buy stop is $40.
Winnebago
NYSE: WGO
$29.14
Sell short. Buy stop is $35.
Ferro Corp.
NYSE: FOE
Take profits!
Buy to cover. Stock hit trailing stop.
Unisys
NYSE: UIS
$6.54
Sell short. Buy stop is $6.90.
SanDisk
Nasdaq: SNDK
$25.05
Sell short. Buy stop is $30.
Ceridian Corp.
NYSE: CEN
$17.07
Sell short. Buy stop is $19.
CenturyTel
NYSE: CTL
$30.51
Sell short. Buy stop is $34.
Bio: Alexander Green is the Investment Director of The Oxford Club. A Wall Street veteran, he has over 16 years experience as a research analyst, investment advisor, and professional portfolio manager. Mr. Green is also considered one of the most talented financial writers in the business. He’s been featured on “The O’Reilly Factor,” profiled by Forbes and Marketwatch.com, and has written for Louis Rukeyser and several other leading financial publications. He currently writes and directs The Oxford Club Communiqué, the Oxford Insight e-letter, and four elite trading services: one focused on momentum stocks, another focused on companies with significant insider buying, another dedicated to international growth stocks and another focused on short-selling fundamentally flawed companies. Mr. Green is also a top-rated speaker at financial conferences around the country.
Copyright – 2005 The Oxford Club, LLC. The Oxford Club does not act as an investment advisor or advocate the purchase or sale of any security or investment. The Oxford Club expressly forbids its writers from having a financial interest in any security recommended to its readers. All of our employees and agents must wait 24 hours after an Internet publication prior to following an initial recommendation. And for hard-copy-only publications, 72 hours after the publication is mailed. Investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. The Oxford Club provides its members with unique opportunities to build and protect wealth, globally, under all market conditions. The executive staff, research department and editors who contribute to The Club’s recommendations are proud of the reputation The Oxford Club has built since its inception in 1984. We believe the advice presented to its members in our published resources and at our meetings and seminars is the best and most useful available to global investors today. The recommendations and analysis presented to members is for the exclusive use of members. Copying or disseminating any information published by The Oxford Club, electronic or otherwise is strictly prohibited. Members should be aware that investment markets have inherent risks and there can be no guarantee of future profits. Likewise, past performance does not assure future results. Recommendations are subject to change at any time.
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