SHREVEPORT, La., May 18, 2005 (PRIMEZONE) -- StockPickReport.Com (IARD #119079, http://www.stockpickreport.com -- the web's only non-mainstream stock rating service), rates Merrill Lynch Semiconductor HOLDRS, iShares MSCI-Japan, Tyco International Ltd. /BER/, Merrill Lynch Market Oil Service HOLDRS.
STOCKPICKREPORT RATINGS:
Merrill Lynch Semiconductor HOLDRS (AMEX:SMH) -- WEAK BUY
http://www.stockpickreport.com/abrating.php?sym=SMH
iShares MSCI-Japan (AMEX:EWJ) -- SELL
http://www.stockpickreport.com/abrating.php?sym=EWJ
Tyco International Ltd. /BER/ (NYSE:TYC) -- SELL
http://www.stockpickreport.com/abrating.php?sym=TYC
Merrill Lynch Market Oil Service HOLDRS (AMEX:OIH) -- WEAK SELL
http://www.stockpickreport.com/abrating.php?sym=OIH
Wednesday, May 18, 2005 StockPickReport Commentary Suncor Still Looks Good Neil Batho, Columnist
Where are we in the market today? Let's reflect back on the past two months when we kept saying to take it really easy. We offered up some suggestions in this commentary along with the regular sections in StockPickReport. We offered up CEI, a Real Estate Investment Trust in the low 16's. It's at $18.18 today and paying an 8.38% yield. We offered up Suncor and Petro Canada, which are basically flat, and we offered up GLD, which is very slightly down. We also offered up RYTPX, which is up about 10%. We said to "take it easy" and "don't try to be a hero" in this market. So, hopefully you didn't.
You may wonder why we keep talking about Suncor, especially in this commentary. "Suncor Energy Inc. is a Canadian integrated energy company that explores for, acquires, develops, produces and markets crude oil and natural gas, transports and refines crude oil and markets petroleum and petrochemical products," reports Neil Batho. It does this in the Athabasca Oil Sands, the largest reserve in the world, in Alberta, Canada. It is the leader in these sands. Petro Canada is also a major player.
Here's proof that we're on the right track with Suncor: You may have noticed that Exxon Mobil and Chevron Texaco have had their stocks hit quite hard in the past few months.
Let's take a closer look shall we? From their recent highs in late February, Suncor is down 12.40%, ExxonMobil is down 16.33%, and ChevronTexaco is down 18.50%. So, Suncor is down the least out of the three. Over the past year, however, Suncor is up about 50%, while ExxonMobil is up about 30%, and ChevronTexaco is up about 15%. Suncor has beat the big two over the past year, AND it has moved down SUBSTANTIALLY LESS over the weakening in oil stocks over the past two weeks. This tells you one BIG thing about Suncor. It has high RELATIVE STRENGTH compared to other oil stocks. When it rallies, it rallies stronger. When there is weakening, it weakens less. This is a great way to determine what stocks to buy in a sector as the sector starts to rebound.
The stocks that hold their ground when the market weakens are the ones that typically start the turnaround as well. Intuitively one might think that it's the ones that get hit the hardest -- but it isn't. Let's look at CEI. Sure, I know it's a boring, boring stock. But we'd rather being boring at times - and be right, than be exciting, and be wrong. For about two months we've been talking about CEI because while the market was "tanking", it was just sitting there and doing almost nothing. That means it is increasing its relative strength. So, when the market started to rally a few weeks ago, CEI is now up 8.18% in three weeks, and it's up a little more than that since we first recommended it.
This is a key point -- relative strength. That's what tells us that Suncor should be ready to do great things once oil stocks start to rally again - and we believe they will. In commodity bull markets, there is always a lot of volatility. That's why all of the commodity stocks have gotten hit very hard in the past few months, many down 20% - 40%. But, Suncor's only down 12.40%. See the pattern? Watch for this stock to do some great things in the future. Symbol: SU.
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