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Friday, 01/16/2004

No Holding Pattern Here
By Nich Sheldon
WTNY - Whitney Holding Corp

Company Description

Nordson Corporation is the world's leading producer of precision dispensing equipment. Nordson systems apply adhesives, sealants and coatings to a broad range of consumer and industrial products during manufacturing operations, helping customers meet quality, productivity and environmental targets. The company also manufactures technology-based systems for curing and surface treatment processes. Headquartered in Westlake, Ohio, Nordson has direct operations in 30 countries and 3,500 employees worldwide.

[Source: Company Press Release]

Reasons to Invest:

My, oh my, what a wonderful week it has been. Bulls and bears are still confused as to which way the market is going. Momentum traders are at a loss because of the seesaw action in momentum swings. Option traders, who were expecting to see the normal January sell-off, are still forking out cash on their bearish entries. And this my friends, is why we dividend reinvestors should be thankful for our longer-term investments, of which don't usually cause us as much stress as the day traders go through. Speculation tells me that this week's Drip of the Week is another one of those no stress investments.

Whitney Holding Corp (NASDAQ:WTNY) is this week's Drip of the Week. From a technical analysis standpoint this stock looks solid. Since March of 2003, the stock has been in a slow moving upward regression channel of which has just topped over the channel at 42 and change. I would advise drip investors to wait for the stock to sell off a bit before entering any long-term DRIP positions. I would like to see a pull back to the 50-DMA (39.60 as of Friday, January 16, 2004), before buying up any contracts. Now that the stock has hit the top of its regression channel, some profit taking should be due in the next few weeks, which could provide the entry point that we are looking for.

The Stochastics indicator has WTNY in Neutral territory, which is usually a good sign. In this case I feel that it is a sign of future weakness. I gather this speculation for the simple fact that the stock was at 100 on the Stochastics indicator only two sessions ago. For those of you who aren't familiar with the indicator, 100 is 20 points over the overbought marker which is found at 80. Every time the stock has fallen from overbought territory to neutral territory the stock has dipped a few points, allowing bulls to seek profits, as well as providing lower entries on the stock.

The MACD still has WTNY on a buy signal. I feel that the buy signal on the stock will remain until we see the stock fold back under its simple 10-DMA, which has served as support for the greater half of 2003. It seems that once the 10-DMA is broken a retest of the 50-DMA is dang near bound to happen. Since August the 50-DMA has only be tested twice, serving as resistance for about a week's worth of trading each time, only to turn back into strong support for the stock. This further backs my expectation of seeing a dip back to the 50-DMA, which would provide that key entry noted above.

One thing to mention is that this stock trades at light volume. For those of you looking to see your DRIP portfolio add on 20-30 points in two or three years, that could be farfetched with WTNY. However, I do think we can see a 15-20 point move over the next few years.

A few days ago WTNY hit a new all-time high of 42.40. I am excited at the thought that we could see this trend continue, especially with no overhead resistance to take the steam out of its momentum.

While all technical signs are a go for the play, the financial viewpoint is not so cheery. Over the first three quarters of 2003, WTNY's total interest income fell -10 percent. Net interest income after LLP increased by 4 percent. Net income grew at a margin of 5 percent. The drop in interest income reflects lower loan outstandings, offset by decreased cost of funds.

The good news is that WTNY yields a 3.17 percent annual dividend, which comes out to $1.32 per share owned. In fact on November 19th, 2003 Whitney increased its quarterly dividend by 10 percent or $0.03 per share.

This ends another exciting episode of the DripAdvisor.com Drip of the Week. Stay tuned next week, as we will spotlight another stock worthy of the DripAdvisor.com limelight.

Until Next Week,
Nich Sheldon
Editor




DRIP Information:
Shares to Qualify = 1
Auto-reinvestment = No
Accept Foreign Accounts: Yes
Temper Enrollment: Yes

Min/Max Investment = $50-$5,000/Quarter


Reinvestment Fees - 
Dividend investment fees: 0
Cash investment fees: 0
Auto reinvestment fees: None


Transfer Agent:
Bank of New York
800-432-0140


Corporate Headquarters:
228 Saint Charles Avenue
New Orleans, LA 70130
Phone: (504) 586-7272
Fax: (504) 586-3658



 
 

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