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Sell Xyratex at Market
The ADR Alert
Monday, June 27, 2005
By Alexander Green, Investment Director
#67
** Sell Xyratex at Market
We expected to see exceptional second-quarter results from Xyratex (Nasdaq: XRTX) last week.
And the British technology leader delivered them. Profits more than doubled on a 57% jump in revenue. (And earnings would have been $13 million higher were it not for a number of one-time costs.)
However, management blindsided shareholders with a prediction that third-quarter results are unlikely to meet estimates. As a result, the stock was met with heavy selling at the end of the week.
After a wild ride, the stock closed Friday within a few pennies of our entry price. Today, I suggest you sell the stock at market. Our goal is to own companies that are beating expectations, not reducing them.
This trade is essentially a wash. But our other international holdings continue to look promising.
(Although both the U.S. and international stock market indexes are in the red this year, our portfolio is up more than 12% – even though our average holding period is only 66 days.)
Last week, for example, Companhia Vale do Rio (NYSE: RIO), Brazil’s largest iron ore miner and logistics provider, announced it will invest $195 million over the next 18 months to expand its port near Sao Luis on Brazil’s northern coast. This will lead to improved sales and earnings.
And Canadian Natural Resources (NYSE: CNQ) and Statoil (NYSE: STO), two major oil producers, are not going to be hurt by $60 oil. In fact, they’re two major beneficiaries.
So use the proceeds from Xyratex to add to our other international holdings.
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
Country
Current Price
Comments
Marvell Tech. (Nasdaq: MRVL)
Bermuda
$39.20
Buy. Sell stop is $34.
Sociedad de Chile (NYSE: SQM)
Chile
$101.75
Buy. Sell stop is $93.
Xyratex Ltd. (Nasdaq: XRTX)
England
Sell
Sell at market.
Comp. Rio Doce (NYSE: RIO)
Brazil
$27.98
Buy. Sell stop is $23.
Canadian Nat. Res (NYSE: CNQ)
Canada
$36.86
Buy. Sell stop is $35.
Statoil ASA (NYSE: STO)
Norway
$19.58
Buy. Sell stop is $15.
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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