Stock Tips: Fundamental & Technical Analysis

Below are a few reports on stocks I believe investors should consider.

Listed on the TSE/NYSE

Sector/Description: Defensive/Pipelines/Income Generating

TRP will be $18.00US by 12/31/2004 (TRP was $9.50US on 11/14/2000)

A Company In Transition is a Stock that will Keep Rising The "slow motion" breakout from TRP is astounding.

It's going through what would take a month or less for a tech stock. But forget about techs, let's search for value. TransCanada Pipelines appears to fill this void. It is breaking out. Little doubt about that.

Fundamentals have changed dramatically over the past year, as the company shed all that "debt" that plagued it from growing in its earnings. Every month I get news from TRP about how it is retiring its preferred shares. It is estimated that asset sales will reach 3.4 Billion. A leaner company means a more focussed one. Less debt, more cash flow, more profits, higher stock price. And dividends are extremely attractive.

Currently, the stock charts tell me the stock will fall..but VERY *LITTLE* as the moving average is acting as support. I continue to monitor the stock and will wait for the mild selling to stop.

Long-term, however, this stock is a big BIG winner. All signals suggest institutional accumulation, with mild momentum (month-to-month) that is very positive. The most recent report (Q3) supports the technical evaluation of a bullish stock. Net income rose 55%, and there is little reason to expect a decline in earnings growth momentum. Recommending this stock as a BUY and attaching a target of $18US over the long-term. (top) or iExchange!

Agilent Technology

Listed on the NYSE

Sector/Description: Technology/Scientific Instruments

A will be $72.00 by 11/1/2004 (A was $46.94 on 11/4/2000)

How Agilent Offers a Good Future Telecom "Play"

Agilent Technologies is a recent HP spin-off company that provides technology for the communication and life sciences sectors, areas that are, and will remain, hot sectors over the next few years. Their most recent announcement affirms that they are at the forefront of providing technological innovation for implementation: a Tachyon device, the 2-Gb/s Tachyon XL2 IC, is now available to developers of storage subsystems, storage routers, host bus adapters and host computer motherboards. These controller ICs are a part of the design of SAN applications ("Small Area Networks"), such as Internet access, digitized video, online transactional processing and other enterprise storage applications. Note, however, that for the most recent quarter, SANs haven't been growing as fast as was thought. This should be viewed from investors as an adjustment to more stable growth levels moving forward.

Among other things, Agilent also has Optical Routing test products. One should anticipate sales in this area will grow as optical networking overtakes "traditional" network technology. From a stock pricing analysis, it would appear that Agilent has been trading negatively as a result of concerns over network growth as well as the perceived bear stage we may be in the semi-conductor business. Given Agilent's diversity in the communications market, and the company's ability to achieve design wins (most recent was an ASIC design win at Cisco - ASIC stands for application-specific integrated-circuit), the stock trades at a reasonable P/E multiple and provides excellent exposure to the telecommunications market. At this point in time, the correction in the fibre-optic & optical networking stocks could be an entry for to-be Agilent shareholders. However, the stock is far safer than many pure-plays as it is a large company with an established name and customer base.

From a technical perspective, Agilent should see short-term rebounds into the high 40's to low 60's. Only a break above $60US would indicate the correction is over. Since the stock is being reviewed from a long-term perspective, a price target of 20% above the correction-trading range, or $72, should be achievable. In addition, this price would represent a current P/E of 53, and a forward (2001) P/E of 34.5 (assuming an broker estimate EPS of 2.09 in 2001). Compared with peers, this is a reasonable price. Feel free to review my other stock picks, as I try to incorporate a short-term and long-term forecast, as well as technical analysis to assist in pin-pointing a reasonable entry point. (top) or iExchange!

SAP

Listed on the NASDAQ

Sector/Description: Technology/Software (ERP)

SAP will be $75.75 by 11/23/2002 (SAP was $38.88 on 11/23/2000)

How a Laggard Will become a Doubly Priced Leader

Sometimes when a sector is shunned, the baby is thrown out with the bathwater, so to speak. Such is the case in SAP, an ERP leader. As you may have noticed, a stock I picked prior to this recommendation was PSFT, a laggard that was in a state of transition. PSFT's story was that it was an old ERP company moving to ASP (application server) and CRM (customer relationship management).

SAP is another story. It is plain cheap, from a valuation perspective, and its transition to a growth "story" has not been recognized, even with good earnings recently posted. The rule of thumb is to wait for another earnings report confirming the reversal, but it is at this time that key things should be pointed out: - mySap is succeeding steadily - SAPs core product is being implemented to be web-based - although the web implementation was slow, the stock market is penalizing the stock excessively - partnerships should accelerate SAPs position in the "new" marketplace i.e. commerce one and b2b ("Enporion") - advertising initiatives should assist the company in driving up sales.

Fundamentally, we continue to see SAP winning key (large) deals. SAP is trading at a significant discount to its peers, namely Oracle and Peoplesoft. Under current negative market conditions (as of November 2000), this environment has created unusual value for SAP (compared to historical P/E levels). Conversely, Oracle & Peoplesoft trade at P/E's that remain high. We view SAP as a continued turnaround story and will watch for continued development in contract wins through its many partners and channels (mySap.com) - If this report was helpful, please feel free to read my other reports, namely on IBM, SSSW, PSFT. (top) or iExchange!