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UVV - Universal Corp.Week Ended: 3/17/01
Price 36.92 P/E Ratio 10.04 52 Week High 39.00
Last Week + 0.90 Earnings Date 05/03/01 52 Week Low 13.50
Picked At 38.99 Date Picked 3/11/01 Sector Consumer/Non Cyc.
Current 36.92 Open 37.33 Change -0.66
Low 36.90 High 37.43 Volume 63,800

Company Description

Universal Corporation is an independent leaf tobacco merchant and has additional operations in agri-products and the distribution of lumber and building products. For the 6 months ended 12/00, revenues fell 10% to$1.65B. Net income fell 5% to $52.8M. Revenues reflect lower tobacco revenues due to delays in shipments from Zimbabwe and smaller U.S. crops. Net income reflects increased interest expense and reduced equity in affiliates.

Play Description

March 11, 2001

There is strong evidence that investors and money managers alike still hold large cash positions. After attempting to rally "value" technology stocks, many were burned later in the week as the NASDAQ made a new low. This set of circumstances helps to explain why UVV continues to rally. This tobacco merchant and distributor of lumber and building products is trading at a very low P/E of 10.22. Investors are extremely risk adverse these days and UVV offers a relative value. UVV actually managed to establish a new 52-week high of $39.00 during a day that saw the Dow Jones Industrials (INDU) drop 213.63 points. This fact may encourage the momentum-trading crowd to jump on board. UVV may really start to roll if it can climb above the $39.50 resistance level established way back in June of 1998. A good time to initiate a position might be when UVV looks like it is going to close above this resistance and has crossed 100,000 shares in daily volume. After a lengthy ascent, the MACD has cooled off but remains positive. OBV is currently making new highs and could be forecasting continued new highs for the stock. The RSI is brushing the top end of its range. Therefore, we would be cautious about picking up the stock if it starts slipping in the early going on Monday, especially if UVV slips below the support offered by the 10-DMA of $38.13.

Picked on March 11th @ $38.99
Change since picked +0.00
Stop Loss @ $37.00


March 15, 2001

Universal has pulled back a bit this week along with the rest of the market. If the profit taking trend continues tomorrow, UVV may test support just slightly above $37.00. We are expecting the rotation out of "safety" stocks will end soon and UVV will take on the task of resuming its uptrend. A close above the 10-DMA of $38.34, accompanied by volume approaching 75,000 shares would be an encouraging sign that the pullback is over and UVV is poised to move higher next week. The RSI, which had been hovering near overbought territory, has pulled back. This fact affords UVV the opportunity to move higher without being encumbered with an overbought condition.

Picked on March 11th @ $38.99
Change since picked -1.41
Stop Loss @ $37.00

March 13, 2001

UVV suffered through a somewhat volatile day, at least by its usually nonvolatile standards. The drop to $37.80 early in the trading session may have afforded some of you the opportunity to pick up the stock at a more favorable price. The drop to this price and the subsequent rally has established a nice support price just below $38.00. If UVV can move above the 5-DMA of $38.72 in the early going tomorrow, the stock could well be on its way to testing the resistance offered by the recently established high of $39.20. One note of caution, though, the MACD did issue a sell signal today. Therefore, we would be cautious about adding positions if UVV drops below today's low of $37.80.

Picked on March 11th @ $38.99
Change since picked -0.31
Stop Loss @ $37.00


Copyright 2001

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