Email Version, Section 1, Sunday 06/17/2001
The SplitTrader.com Newsletter Sunday 06/17/01 1 of 2
Copyright 2001, All rights reserved.
Redistribution in any form is strictly prohibited.
- Your World Leader for Trading Stock Splits on the Internet -
Posted online for members at: http://www.SplitTrader.com
To view this email newsletter in HTML format with imbedded
charts and graphs, click here:
In This Newsletter:
Market Commentary - Expirations and Exasperations
Definition of the Day
Friday's Split Announcements - NFG
Event Calendar - Next Week's Economic reports
Upcoming Splits for next two weeks
Successful Announcements - Last Week
New Candidates List
Expected/Likely Announcements for the Coming Week
Market Stats For the Week
Index Close Change Support Resistance
DJIA 10,623.64 -353.36 10,445.00 10,750.00
Nasdaq 2,028.40 -186.70 2,000.00 2,325.00
S&P 500 1,214.36 -50.60 1,200.00 1,250.00
Russell 2000 495.14 -19.63 485.00 515.00
PHLX Semi 608.98 -66.72 578.00 725.00
Expirations and Exasperations
Three witches rode into Wall Street on Friday, propelled by an
evil wind out of the North. Not only was it triple witching
Friday (the expiration of futures, options on stocks and options
on indexes), but we also received word out of Toronto that Nortel
Networks (NYSE:NT) will suffer a whooper of a second quarter
Nortel warned that it is facing a $19.2 billion loss for its
second quarter and outlined an additional 10,000 reduction of its
workforce. This comes on top of its previous announcement of
20,000 in layoffs. The networking giant also reiterated that it
doesn't see a turnaround until at least 2002. The bottom line is
that NT now expects to report a loss of $1.5 billion, or $0.48
per share versus a loss of $0.06 per share expected by First
Call. Needless to say, the stock finished lower. NT lost $0.70,
or 6.98%, to $9.86.
While the Nortel news served to put a drag on the already
frazzled networking sector, traders in other corners of the
market were treated to an unusual amount of volume that actually
worked to prop up the market. The heavy volume in the morning
was the result of traders unwinding options positions. After an
initial dip, it appeared as if most of these trades were biased
to the upside. Many pros commented that were it not for triple
witching, the losses on the major indices would have been more
Also acting like a two-ton anchor on the broader market was a
gaggle of economic reports that again illustrated that we still
have a ways to go down the road to economic recovery. Capacity
utilization, the extent to which plants are being used, fell to
77.4%, the lowest level since August of 1993. Industrial
production also dipped by 0.8% and the CPI rose 0.4% in May and
just 0.1% at the core. While inflation is certainly not in the
picture at this time, it is worrisome that companies are not able
to pass on cost increases to the consumer.
Once again, the question on everyone's mind is when an economic
about-face might occur. The more warnings and economic data that
start piling up in the "recovery by 2003" basket as opposed to
the 2002 or late 2001 basket, the more buyers are stepping back
and wondering if it's worth the opportunity cost to be in the
market if the recovery is going to take longer than expected.
After an initial free fall, the NASDAQ (COMPX) found some
traction and edged higher into the close. Surprisingly (given
some high- visibility earnings warnings) the tech heavy index
lost just 15.64 to 2028.43. Volume was a respectable 2.1 billion
shares and decliners beat up advancers 2136 to 1626.
Over in the Dow (INDU), we saw a similar picture unfold. Early
morning weakness was replaced by buying interest by midday. The
old economy average ended the session down 66.49 to 10,623.64.
Volume came in at 1.5 billion shares on the NYSE. On the
disturbing side, new lows versus new highs came in almost even,
with 80 new highs and 62 new lows. Prior to this week new highs
had been consistently beating new lows by a wide margin.
Of all the major indices, only the Russell 2000 (RUT.X) remains
above major support levels. The Russell has been tracing a
double top, but has yet to close below its neckline at 493.
However, the RUT.X finished Friday's session dangerously close to
neckline support at 495.13, down 0.25.
Stocks and Sectors on the Move
Besides the Nortel bomb, there were a few other mea culpas and
one legal ruling that grabbed some headlines on Friday. Chief
among these was McDonalds Corp. (NYSE:MCD), which warned for the
third quarter in a row that it would not meet consensus
estimates. The "not so golden" arches said it will miss
estimates by as much as $0.04 per share in posting earnings of
between $0.34-$0.35 per share for its second quarter. Currency
exchange rates and mad cow were blamed for the shortfall. So
much for defensive issues! MCD closed down $1.29 to $28.67.
Another stock which could be considered a defensive play, Proctor
and Gamble (NYSE:PG), declared Friday that it will be taking a
larger than expected charge for its recent corporate
restructuring. The charge will result in a fourth quarter loss
for the consumer staples giant. On the news, PG lost $2.26 to
On the legal front, a Delaware judge ordered that Tyson Foods
(NYSE:TSN) is to go ahead with its merger with IBP (NYSE:IBP)
(the giant hog processor). In an unusual ruling, the judge
upheld a lawsuit filed by IBP, which sought to make Tyson go
through with the merger. Tyson had bailed out earlier, citing
IBP's failure to disclose accounting irregularities as the reason
behind their walking away from the deal. I can't imagine that
anything good will come out of the ruling. If management cannot
mesh, any synergies realized from the merger will become a mute
point if the companies cannot unite towards on goal.
Turning to sector action, it was not surprising that during a
week of warnings and market weakness that the defensive sectors
held up the best.
Within the defensive sectors, healthcare and consumer staples
(minus the above mentioned PG debacle) were the clear standouts.
A couple of healthcare stocks that have grabbed my attention
lately are Splittrader favorite Tenet Healthcare (NYSE:THC) and
Healthsouth (NYSE:HRC). THC emerged from a symmetrical triangle
formation back on 5/31 and has not looked back. HRC just broke
out of a double bottom formation on Friday and is less extended
than THC at this point. THC closed up $1.14 to $51.09 and HRC
closed higher by $0.64 to $14.40.
Checking into the consumer staples stocks, Kellogg (NYSE:K) has
been on a tear. The stock just broke out of a huge symmetrical
triangle formation that was started back in last December. The
bullish breakout in Kellogg was accompanied by volume of 2.5
million shares; four times its average trade.
In addition to Kellogg, Unilever (NYSE:UN) just completed a
bullish breakout. The stock busted up through its downtrend line
on volume of 1.5 million shares. UN typically trades 600,000
shares. When large institutions decide to start accumulating
shares of a stock, it's like trying to hide Shaquille O'Neal at
Looking Forward, Always Forward
We have another light week coming up as far as economic data goes
and let's hope the same is true for earnings warnings. If we can
trade sideways on light volume next week, traders will be pleased
as punch. Now that we have broken support on the major averages,
I am thinking damage control.
That being said there is no reason to make like an ostrich just
yet. As mentioned above, there are plenty of stocks within the
strong sectors that are just now sharpening their horns and
acting bullish. Splittrader's Current Play list is starting to
fill up with more defensive names, so if you havent had a chance
to glance at them, you might want to take a peak.
So the trading mode hasnt changed much from last weekend. Keep
the stops tight and go for small gains. Heck, you can always get
back into a stock that you have just sold for a profit.
Enjoy Your Weekend
Here's to all you fathers out there, mine included. Have a great
Father's Day, and may your jug of Old Spice come with the receipt
and a tee time.
Have you wanted to learn to trade options but didnt know
where to go. OptionInvestor.com is the place.
Option 101, Ask the Analyst, Traders Corners all articles
to teach you how.
Learn how to do it.
Get a two week free trial from OptionInvestor.com
Definition of the Day
The United States Treasury Budget is a monthly account of the
U.S. governments surplus or deficit. The budget is normally
released on the 15th workday of the month that follows the
reporting period; it is provided by the Department of Treasury.
For the complete definition, please go to:
Friday's Split Announcements
Friday, June 15, 2001
National Fuel anticipates a great year; declares stock split and
increases cash dividend
After the close on Thursday, Nation Fuel Gas Company (NSYE:NFG)
announced its Board of Directors' approval of a 2-for-1 stock
split on the company's common stock and a 5.2 percent increase in
the quarterly cash dividend.
Still subject to SEC approval, the stock split will be payable on
September 7, 2001 to shareholders of record on August 24, 2001.
NFG has not split its stock since 1987 when shares were trading
in the $40 range. Upon the execution date of the current split,
outstanding shares will effectively increase to approximately 80
million, with the float doubling to 74 million.
For the complete announcement, please go to:
Mondays Expirations by Payable Date
Trading Split-Adjusted June 19
Diagnostic Products (DP) splits 2:1
Shuffle Master (SHFL) splits 3:2
SunGard Data Systems (SDS) splits 2:1
For the week of June 18, 2001
NAHB Housing Market Jun Forecast: N/A Previous: 57
Housing Starts May Forecast: 1.60M Previous: 1.609M
Building Permits May Forecast: N/A Previous: 1.587M
Oil/Gas Inventories Q1 Forecast: N/A Previous: 316.2MB
Leading Indicators May Forecast: 0.2% Previous: 0.1%
Treasury Budget May Forecast: N/A Previous: 189.8B
MBA Mortgage App 6/15 Forecast: N/A Previous: 553.3
Jobless Claims 6/16 Forecast: N/A Previous: 428,000
Initial Claims 6/16 Forecast: 430K Previous: 428K
Trade Balance Apr Forecast:-30.9B Previous: -31.2B
Current Account Q1 Forecast:-106.0B Previous: -115.3B
Philadelphia Fed Jun Forecast: -10.0 Previous: -8.8
SEMI Book-to-Bill Ratio May Forecast: N/A Previous: 0.42
ECRI Wkly Leadng Index 6/15 Forecast: N/A Previous: N/A
Week of June 25th
Jun 25 Existing Home Sales
Jun 26 Durable Orders
Jun 26 Consumer Confidence
Jun 26 New Home Sales
Jun 27 Oil/Gas Inventories
Jun 27 FOMC Meeting
Jun 27 MBA Mortgage App Survey
Jun 28 Agricultural Prices
Jun 28 FOMC Minutes
Jun 28 Initial Claims
Jun 28 Help Wanted Index
Jun 28 Online Help Wanted Index
Jun 29 GDP - Final
Jun 29 Chain Deflator - Final
Jun 29 Chicago PMI
Jun 29 Mich Sentiment - Rev
Why put all your risk into one stock when you can play the
Learn how to invest in the OEX, QQQ, and SPX. Get intraday
market updates, plays, education and daily commentaries by
those who know.
Sign up for a two week free trial and see for yourself at
Symbol Company Name Splits Payable Executable
GNWR - Genesee & Wyoming 3:2 06/15/2001 06/18/2001
IBOC - Int'l. Bancorp 5:4 06/15/2001 06/18/2001
EGBN - Eagle Bancorp 7:5 06/15/2001 06/18/2001
SDS - SunGard Data Systems 2:1 06/18/2001 06/19/2001
DP - Diagnostic Products 2:1 06/18/2001 06/19/2001
SHFL - Shuffle Master 3:2 06/18/2001 06/19/2001
FRED - Fred's 5:4 06/18/2001 06/19/2001
CAKE - Cheesecake Factory 3:2 06/18/2001 06/19/2001
FCEL - FuelCell Energy 2:1 06/19/2001 06/20/2001
RDN - Radian Group 2:1 06/20/2001 06/21/2001
ESRX - Express Scripts 2:1 06/22/2001 06/25/2001
LNCR - Lincare Holdings 2:1 06/22/2001 06/25/2001
DAKT - Daktronics 2:1 06/22/2001 06/25/2001
FHCC - First Health 2:1 06/25/2001 06/26/2001
ARMF - Armanino Foods 2:1 06/25/2001 06/26/2001
USPH - U.S. Physical Therapy 3:2 06/28/2001 06/29/2001
MTON - Metro One Telecom 3:2 06/29/2001 07/02/2001
LOW - Lowes 2:1 06/29/2001 07/02/2001
Successful Announcement Predictions For The Past Week
Symbol Company Date Announced
NEW SPLIT CANDIDATES LIST
ADVS - Advent Software $63.80 (-3.46)
As Advent approaches previous split-levels ($73-$80) we're
anticipating another possible split with the company's next major
event. Stock prices have doubled since April so watch for an
announcement with the company's next earnings release in mid-July.
AGN - Allergan, Inc. $84.29 (-6.15)
Allergan announced its last 2:1 split in 1999 when the stock was
trading at $57. At current prices of $85, we expect the next
announcement to be delivered with earnings around July 24 or with
an impromptu BoD meeting. There are approximately 132 million
shares outstanding and 300 million shares are authorized,
therefore, the company is easily poised for another 2:1.
CERS - Cerus Corporation $69.65 (-3.38)
This medical products developer has not yet split its shares but
prices are at some key psychological levels now. Recently, Cerus
received the Discover Magazine Innovation Award, recognizing the
company's Helinx technology as a "Top Innovation in 2000". There
are plenty of authorized shares to execute a split so watch for
an announcement with the Company's next BoD meeting or with
earnings in July.
CHBS - Christopher & Banks Corp. $31.50 (-6.88)
CHBS is off its 52-week high of $47.50 but with the last two
splits being declared when prices were at $32, we feel that
Christopher & Banks is a great candidate for another
announcement. Additionally, shareholders will be voting on August
1st on an amendment to increase the number of authorized shares
from 30 million to 75 million. Earnings are expected to be
released on July 21, so the Board may choose that time for the
WTSLA - Wet Seal, Inc. $34.35 (-1.60)
On June 11, Wet Seal filed with the SEC a proxy to vote on
increasing their authorized shares for the specific purpose of
executing a 3:2 stock split as stated in the Company's PRES 14A
filing. Even with shareholder approval, the final declaration is
pending positive market conditions, but we'll keep an eye out for
a probable announcement. A date for the shareholder meeting has
not been set, but it is expected to occur in early July.
Expected/Likely Announcements for the Coming Week
Please use courier new font to view table
Symbol Company To Announce
DPL DPL Inc. 6/19
AGE A.G. Edwards 6/20
DPL - DPL Inc. $27.40 (-0.74)
This stock has been pretty choppy recently, but we want to give
you a heads-up for DPL's BoD meeting on Tuesday. They like to
declare 3:2 splits at around $28, judging from the last three
announcements, so stay alert if you like to trade electric
service companies. Earnings are due out towards the end of July,
which could be the next possible time for a split announcement if
we don't get it on the 19th. There are enough authorized shares
for a 3:2 dividend.
AGE - A.G. Edwards $44.01 (-2.75)
AGE announced their last 3:2 split in 1997 when the stock was
trading at $40. Due to current price levels, we're going to be
watching for a possible split announcement from AGE on Wednesday.
The Company has a shareholder meeting scheduled for 10 a.m. that
day but earnings are expected to be released during the week as
well; the exact date has not been given. There are 550M shares
authorized with 80M shares outstanding.
Tired of waiting on trades to execute?
Does your broker offer Stop Losses on Options?
Trade instantly with Stop Losses at PreferredTrade Inc.
Stop Losses based on the option price or the stock price.
Move your trading into the next millennium with PreferredTrade.
Anything else is too slow!
Please read our disclaimer at:
For more information on advertising in the SplitTrader.com
Newsletter or any Premier Investor Network newsletter, please
Send questions or comments to: email@example.com
To stop receiving this SplitTrader Update,
send email to: removeST@splittrader.com