Dapoxetine

CHICAGO -- Zacks Experts announce commentary and recommendations on three stocks: Smith International (NYSE:SII), Genesis Microchip (NASDAQ:GNSS) and Johnson & Johnson (NYSE:JNJ). Employing various timing and investment strategies, Zacks Experts Watch gives valuable insight to individual investors, especially in turbulent markets. For the full commentary, visit; http://at.zacks.com/?id=101

Here are the highlights from the Experts Watch column:

After a very potent Santa Claus rally, and a difficult start to the New Year, investors have been left a bit flummoxed. The extreme readings of positive sentiment throughout the market at the end December saw the market drift higher for little or no reason. However, after it became clear a Santa Claus rally would come to fruition, there was little the bears could do to fight it off. Yet, the bears launched a correction immediately upon the inception of 2005, which shook out a bunch of the complacent investors. The question now is, "What's Next?" The experts scrutinize sentiment and fundamentals to answer this question and highlight their favorite stocks for this New Year.

Dr. Melvin Pasternak, editor of the StreetAuthority Swing Trader, notes that bullish sentiment has declined dramatically over the last several weeks. The 10-day moving average of the CBOE Put/Call Ratio has risen to .82, a neutral level, after hovering near .55 for most of December. The low ratio of puts, contracts to sell a stock at a given price level due to expectations it will fall, relative to calls indicates that the options traders were broadly expecting stocks to rise. Hence, the increase in the ratio is evidence that there is less expectation for stocks to rise.

Right now, Pasternak recommends that Swing Traders take a position in oil-field services stock Smith International (NYSE:SII). Smith hit a peak near $62.00 in late November, before bottoming at $51.60 earlier this month. The stock is now rebounding smartly. Dr. Pasternak thinks SII can test its old high.

Pasternak opened a position in Genesis Microchip (NASDAQ:GNSS) earlier in the week in his model portfolio. Genesis manufactures integrated circuits which enable the viewing of graphic images on flat panel displays. The stock dropped from a high of $22 in January 2004 to a low just beneath $10 in early July. It then recovered and made a double top formation in November and December. The stock again appears to be heading south. The shares broke the Intermediate uptrend line in early December and have been trending lower since that time. Genesis is demonstrating declining relative strength to the S&P 500.

Richard Moroney, editor of Dow Theory Forecasts punctuates the astonishment at the levels of bullishness, referencing the Investors Intelligence survey that marked level of 63% of investment advisers as bullish. He cites a number of trends the bulls can find as evidence for their investment thesis, including the Presidential and the 5-year cycles. Further, monetary policy provides support in the form of dividends.

Moroney looks for rising earnings and sales trends for his stocks, and sees the aggregate trends as moving in the market's favor. One such stock is Johnson & Johnson (NYSE:JNJ), which is the fourth-largest U.S. drugmaker and the largest maker of medical devices. Late last month, J&J filed a new-drug application for Dapoxetine, expected to be the first oral prescription therapy for premature ejaculation. FDA approval of the treatment could come in late 2005. For 2004, per-share earnings should climb about 16% to $3.07. That estimate has climbed $0.04 over the last three months. For 2005, the consensus estimate is $3.35, up $0.05 since October.

Read the full report with insight from the experts at Zacks.com: http://at.zacks.com/?id=102

About Zacks Experts Watch

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