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[BonVivant]

Hotline
December 7, 2002

This is Louis Navellier. It is Saturday, December 7, 2002.

Well, I have to tell you that it’s getting pretty exciting out there on Wall Street. There was a pretty severe sell-off here in the last several days among the tech stocks, but our stocks are firming up very, very nicely. This is because Wall Street is starting to focus on fundamentals and we have better fundamentals than the market. So even though the market was having a very bad series of days, our stocks were very firm and some of them were drifting higher. That was good.

The big news on Friday was that the unemployment rate shot up from 5.7% to 6%. Then, President Bush apparently Treasury Secretary Paul O’Neill and Economic Advisor, Lawrence Lindsay, to resign. There is a lot of speculation surrounding this because it’s political, but it seems to center around the notion that those asked to resign were not as cooperative on the elimination of double taxation on dividends. So there a lot of economic stimulus is going to be added to the economy via the Bush Administration and the new Congress. It looks like anybody that gets in the way is out.

I think that’s a very good sign and I think the odds of the elimination of double taxation on dividends continues to rise. This issue was on the cover of the Wall Street Journal on Wednesday. It’s confusing whether or not they will eliminate the taxes on the corporate level or the individual level, but the Wall Street Journal speculated that they’re going to do it on the individual level. Just imagine if that happens—if you’re a conservative investor, you could buy a CD and pay up to 38.6% in Federal taxes on your interest, or you could buy a dividend and pay no taxes. This would destroy the municipal bond market and would cause more money to pour into the stock market. This is a very, very bullish event.

So I’m very, very excited. I can’t wait to see what via the Bush Administration and the new Congress will propose. The sign that they’re serious is the fact that they shook up their economic team. So I think it’s going to be pretty smooth sailing here, especially on those high-dividend yielding value stocks.

We have predominantly growth stocks on this Blue Chip buy list, but there are still a lot of stocks that can give you a good dividend yield, like ConAgra Foods (CAG), Diageo PLC (DEO) and ENI (NYSE: E). Dividend yields are going to continue to rise. Not only did General Electric raise their dividend not too long ago, but also Nike just did. So more and more growth companies are going to raise their dividends.

Let me walk you through what the best stocks are right now, starting with the conservative stocks. Anheuser Busch (BUD) is still an excellent buy. It’s slowly getting stronger here.

CNOOC (NYSE: CEO), the Chinese oil company, is not only a good buy but it’s starting to break out. That’s looking great right now. We still have our "hold" on Coca-Cola (KO) but it is basing and seems to be settling down very nicely.

ConAgra Foods (CAG) is also basing and I think it’s an excellent buy right now. It has a 4% dividend yield. Diageo PLC (DEO), the largest spirits company in the world, had been a little soft. It’s trying to sell its Burger King unit. It seems to be settling down but we still have a "hold" on it.

ENI (NYSE: E), the Italian oil company with vast interests in Iraq, is a good buy. It seems to be getting stronger here near-term. Gillette (G), which we have a "hold" on, is still settling down here. I’m very, very pleased with it and I think it will just rest here for a bit and then probably resume going higher.

Harley-Davidson (HDI) is one of the best buys this week. It has pulled back and is a phenomenal buy. Harley-Davidson moves in a funny manner. It tends to surge on its earnings and sag in between earnings seasons. It’s a good buy here near-term.

Hospital Corp. of America (HCA), the health care company we have a "hold" on, is slowly recovering here, but we don’t want you to buy any more. Procter & Gamble (PG) is a good buy and is getting stronger here.

Progressive (PGR), the auto insurance company, has pulled back. I think it’s an excellent buy right now. Stryker (SYK), one of our Top 5 stocks, is a good buy. It looks like it’s getting stronger here.

United Health Group (UNH), which has been one of our top stocks for some time, is now on the road to recovery. It was rallying when the market was soft, so it’s looking good here. WellPoint Health Networks (WLP) is also recovering. It’s looking better here.

Wrigley’s (WWY) is an excellent buy here.

Moving on to the moderately aggressive stocks, Air Products & Chemicals (APD) was very strong and now it’s basing at a high level. It looks good here near-term. Dell Computers (DELL), one of our Top 5 stocks, pulled back with the tech sector but it’s now basing and getting ready to launch again. It’s a good buy here near-term.

Johnson & Johnson (JNJ) is settling down. It had some bad news that one of its drugs in Europe isn’t going to be sold anymore as the generics are going to come out and attack it. This drug is not sold in the United States. That news hurt the stock, but it’s settling down and I think it will be fine here. It’s a good buy near-term.

Lockheed Martin (LMT) is also a good buy right now. It looks like it’s getting stronger here. Nissan Motors (NASDAQ: NSANY) is one of the best buys this week. It has pulled back and is a phenomenal buy. Auto sales are kind of soft right now because they’re doing the year to year comparisons and there was a lot of 0% financing a year ago. But Nissan has a great product line and is doing wonderfully here near-term.

TJX Companies (TJX) is a good buy right now. We’re getting mixed same-store sales reports from all the retailers, but they’re a discount retailer so they should be OK. And I think Wal-Mart (WMT) is a good buy right now. They had a record sales day after Thanksgiving and I think they’ll do fine this holiday season.

Moving on to the aggressive and more powerful stocks, Bed, Bath and Beyond (BBBY) is a good buy right now. It’s still one of my favorite stocks. Fox Entertainment (FOX) has pulled back and is a good buy right now.

Lennar Corp. (LEN), the homebuilder, is a good buy. And Lowe’s Corp. (LOW), the home improvement store, is a pretty good buy but I have to tell you that it has been quite strong and I expect it to get stronger soon.

By the way, the Fed is going to be meeting later this month and it will be interesting to see if the Fed is going to do anything else to stimulate the economy after their 50 basis point rate cut. Frankly, I think most of the burden is on the Bush Administration and the new Congress. The shake-up on President Bush’s economic team is a good sign that they’re going to make some really drastic changes here.

It’s unfortunate that unemployment is rising and it’s unfortunate that the economy is still sputtering. But I think we’re going to get a lot of stimulus to help the stock market and I’m very excited about the dividend tax relief they’re going to pass. If it’s passed on the individual level versus the corporate level, that’s even better because all yield-hungry investors will return to the stock market. If that happens, just imagine the flow of funds pouring into the market!

So I’m still expecting a very good year-end rally for our stocks. The focus is increasingly on fundamentals and I expect a phenomenal January. Hang in there and ride this wave. There was a big short covering rally with a lot of techs and telecoms rallying. That is settling down now and now it looks like the quality stocks like I own on the buy list are rising to the top.

That’s all that’s happening. I’ll keep updating the hotlines any time the Dow swings more than 200 points per day or the NASDAQ swings more than 100 points per day. So I’ll keep talking to you during fast market conditions. Take care.