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Friday, 04/23/2004

Double Feature
By Nich Sheldon
ITT - ITT Industries Inc

Company Description

ITT Industries, Inc. (www.itt.com) supplies advanced technology products and services in key markets including: fluid and water management including water treatment; defense communication, opto-electronics, information technology and services; electronic interconnects and switches; and other specialty products. Headquartered in White Plains, NY, the company generated $5.63 billion in 2003 sales.

[Source: Company Press Release]

Reasons to Invest:

Since last weeks edition of the Drip of the Week was never posted, I decided I would supply you with a double feature this week. The first of two companies that I am spotlighting is ITT Industries Inc (NYSE:ITT).

Citing a strong Q1 results led by their Defense, Water/Wastewater and Electronic Components businesses, ITT Industries Inc announced on 04/22/04 that they were raising their fiscal year earnings target to a range of $4.40-$4.50, which would be 14%-17% higher than last years earnings. ITT also raised their 2004 revenues estimate to $6.4 to $6.6 billion, which would tabulate to a 14%-18% increase over 2003.

In a news release dated April 19th, 2004, I read that the Pentagon was planning to award over $25 billion in contracts. Sometime this month the Pentagon is going to award up to a $3 Billion dollar contract to either General Dynamics or ITT Industries Inc. Then in May they pick one of the companies vying for an additional $4 Billion of that project. As you can see, if ITT is awarded this contract, this could really help out with their earnings, revenues and net income, ultimately sending the stock higher.

On March 15th, ITT was a $206 million contract to provide telecommunications engineering support for the FAA. This is a seven year contract for ITT.

ITT hit new all time highs on Thursday, April 22nd, reaching as high as 80.25. In today's market action ITT broke yesterday's high, but as the market has yet to sound the closing bell, I am not going to start guessing where the stock could reach by 4:00 Eastern Time. More impressively, ITT has been gliding through a seven month regression channel, testing both the top and bottom bars of this channel.

ITT has an intraday market cap of 7.30B and a trailing P/E of 19.06. Their profitability margin last year was 6.71 percent, on an operating margin percentage of 9.37 percent. In 2003 revenues jumped 17 percent to $1.52 billion. The company's net income grew by 2 percent to $88.1 million, which was noted to be a direct reflection of higher sales in all of ITT's segments.

ITT has a 52-week change percentage of 39.91 percent, or 11.86 percent relevant to the S&P 500. The stock trades at a volume of 500K, and the daily, weekly & monthly charts all look outstanding.

The MACD on the monthly chart has ITT on a strong buy signal, while the Stochastics indicator notes ITT nearly 15 point into overbought territory.

On the weekly chart, ITT has just given off a fresh buy signal on the MACD indicator. However a bearish crossover has just occurred on the Stochastics indicator, perhaps in hopes to bring the stock back to neutral territory.

The daily chart on ITT notes the stock in neutral territory on the Stochastics indicator, and a fresh buy signal has been given off on a bullish crossover on the MACD.

A quick look at the Point and Figure Chart on ITT, and I note that its on an Ascending Triple Top Breakout with a bullish price objective of $108.00. The bullish price objective is 8 points over Yahoo's high estimate of $100.00, however, I am speculating that we could see FMBI make a trip of the triple digit mark, probably halting around $102 by years end.

The company has a dividend percentage growth rate expectancy of 6.67 percent over the next year, 2.18 percent over the next three years, and 1.30 percent over the next 5 years. They expect their sales growth rate to be 12.8 percent over the next year, 5.23 percent over the next three years, and 4.60 percent over the next 5 years. Earning per share growth rates are estimated to be 2.34 percent for the next year, 12.16 percent for the next three years, and 13.16 over the next five years.

ITT Currently yields a 0.85 percent dividend, which calculates out to an annual dividend of $0.68 per share owned.

This ends one exciting episode of the DripAdvisor.com Drip of the Week. Stay tuned below, as I will spotlight another stock worthy of the DripAdvisor.com limelight.

Broker Recommendations

Strong Buy         7
Buy                1
Hold               7
Sell               0
Strong Sell        0

Brokers Covering  15


DRIP Information:
Shares to Qualify = 1
Auto-reinvestment = Yes
Accept Foreign Accounts: Yes
Temper Enrollment: Yes

Min/Max Investment = $50-$10,000/inv


Reinvestment Fees - 
Dividend investment fees: 0
Cash investment fees: 0
Auto reinvestment fees: 0


Transfer Agent:
Bank of New York
800-254-2823


Corporate Headquarters:
4 West Red Oak Lane
White Plains, NY 10604
Phone: (914) 641-2000
Fax: (914) 696-2960
Email: theodore.economou@itt.com

*******************

Double Feature: Part Deux
By Nich Sheldon
FMBI - First Midwest Bancorp Inc

Company Description

First Midwest is the premier relationship-based banking franchise in the wealthy and growing suburban Chicago banking markets. As the largest independent bank holding company and one of the overall largest banking companies in the Chicago metropolitan area, First Midwest provides the full range of both business and retail banking, trust and investment management services through approximately 70 offices located in 49 communities, primarily in northeastern Illinois.

[Source: Company Press Release]

Reasons to Invest:

First Midwest Bancorp Inc (NASD: FMBI) looks fundamentally solid to me, in respects with its chart. News wise, FMBI has just been given a new star analyst ranking, as well as a new coverage initiated at "outperform" rating by Ryan, Beck and Co. Oh and did I mention the company yields a 2.56 percent dividend!

FMBI announced earnings on Monday, April 21st, 2004, resulting in a net income increase of 6.3 percent. The president noted that "Recent signs of further economic strength, as measured by economic output and employment statistics, are beginning to be reflected in a movement to higher interest rates." After all, we are supposedly in a recovering economy. There has been plenty of rumors going around that interest rates are going to be raised and will be raised throughout the year. If we can get in early, I am hoping that we can ride this stock through its proverbial glass ceiling, as the Fed hikes up interests rates in the coming months. In the same report, FMBI announced that Net Interest rates rose 9.1% to $56.9 million for Q1.

As I noted before, First Midwest Bancorp yields a hefty dividend of 2.56 percent ($0.88 annually), not to mention they a dividend percentage growth rate expectancy of 12.86 percent over the next year, 8.32 percent over the next 3 years, and 10.11 percent over the next five years.

Their market cap is 1.59 billion. They have a trailing P/E of 17.03 and a forward looking P/E of 14.10. FMBI's profit margin is 34.70 percent, and their income statements show revenues at 271.5 Million. The company's 52-week change is 25.20 percent, and the stock trades on a average daily volume of 90K-135K. They have 46.52M shares outstanding, of which 6.06 percent is held by insiders.

Like most bullish charts, FMBI has been in a tightly wound regression channel since March of 2003. The top and bottom bars of the channel have served as support and resistance for this entire 13-month period, and I am expecting more of the same for this year.

The MACD on the daily chart is getting set to spark a bullish crossover, and the Stochastics indicator has the chart in neutral territory. I drew up the Float Turnover Channel tool on QCharts.com and noticed that FMBI is nearing the top of this channel (which is at approximately 34.65, on the 50 Bar). I would hope to see a close over this mark (34.65) before I added any of these DRIP positions to my portfolio. We'll call a close at 34.66 or higher our entry point, and this is when I would call my broker to purchase the one share that is required in order to take part in the DRIP plan.

The Stochastics indicator on the weekly chart has just sparked a fresh buy signal as the bullish bar has just crossed over the bearish bar, albeit in overbought territory. The MACD on the weekly chart has shown signs of convergence for a few months now, indicating when traders sought profit taking, as well as when new entries were filled.

The monthly cart shows a massive buy signal on the MACD, yet a bearish crossover on the Stochastics indicator.

The Point and Figure chart on FMBI notes the stock on a Bullish Triangle Breakout, and has a revised bullish price objective (sine their previous price objective was hit) of 53.00. Dividend Investors might find it interesting to note that this is 14.00 points higher than Yahoo's high target estimate. I however, speculate that once we get a breakout over 34.65, we're going to see at minimum a trip to the 41-44 range by year end, and 51-54 in the next two years. Mind you, FMBI only gained 8 points over the entire year for 2003.

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

Broker Recommendations

Strong Buy         2
Buy                2
Hold               6
Sell               0
Strong Sell        0

Brokers Covering  10


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

Min/Max Investment = $100-$5,000/quarter


Reinvestment Fees - 
Dividend investment fees: 0
Cash investment fees: 0
Auto reinvestment fees: N/A


Transfer Agent:
American Stock Transfer
800-962-4284


Corporate Headquarters:
300 Park Blvd., Suite 400, P.O. Box 459
Itasca, IL 60143
Phone: (630) 875-7450
Fax: (630) 875-7399
Email: investor relations@firstmidwest.com


 
 

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