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Dartline™ October 20, 2006 - 7:30 am
As constantly preached, the DIJA closing above 12000 means nothing and to look instead at the support level of the other prime averages to point the direction of the market. With the S&P 500 Index up 0.94 points at 1366.90 and Nasdaq Composite Index up 3.79 points to 2340.94 are the more important indicators. Most professionals are confused by the overall strength in the equity markets, believing that rising oil prices and reported business weakness in the Mid-Atlantic region should have dampened enthusiasm for equities.    Any declines would be short term, and represents an excellent opportunity to select stocks with improving fundamentals.
 
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Company Name: Watts Water Technologies Inc. (WTS) 37.15. WTS manufactures water transmission and support products. Revenue from the company's recent acquisitions of Core Industries Inc., Dormont Manufacturing Company and ATS Expansion Group have became major growth and profit engines. With Black Teknigas Limited, a manufactures of gas control systems, WTS business model is producing high margin profits. Selling at 12 times forward earnings WTS is poised to increase in price over the near term. MODERATE RISK BUY WITH EXIT POINT AT 55.

Ticker
Last Trade
Direction
Entrance Point
Exit Point
WTS
October 20, 2006 - 7:30 am
37.15
55.00


P/E Ratio: 19
Forward P/E Ratio: 12 (Decmber 2007)
Float Shares2: 27 m
Company Guidance: 0.56 vs. 0.41 (Sept 06 / 0.57 vs. 0.46 Dec 06    
Recommendation3: Friedman Billings as Outperform/Needham & Co. as Buy
Support4: 34.50
Resistance5: 40.03
Under Accumulation6: YES
Under Distribution7: NO

 


 

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