Schaeffer's Street Chatter Highlights the Following Stocks: Altria Group, Procter & Gamble, and Research in Motion Limited

Business Wire, Sept 21, 2004

CINCINNATI -- Today's "Street Chatter" from Schaeffer's Investment Research focuses on: Altria Group (NYSE:MO), Procter & Gamble (NYSE:PG), and Research in Motion Limited (Nasdaq:RIMM). "Street Chatter" is a report that analyzes three newsworthy stocks that are generating a lot of attention on Internet message boards. "Street Chatter" is published on www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research.

For additional information about this report or to have it delivered to you free via email every day click on the following link: http://www.schaeffersresearch.com/redirect.aspx?CODE=PRSC1M&PAGE=1 .

Street Chatter:

1. The AMEX Tobacco Index (TOB) is one of only a few sectors trading in the minus column today. The U.S. government has officially begun opening arguments in its $280 billion civil racketeering suit against the tobacco industry. Altria Group, the parent of Philip Morris (NYSE:MO) , is the worst-performing member of the Dow Jones Industrial Average (DJIA) today, having surrendered about two percent of its value.

In mid-May, MO shares endured a sudden plunge that was ultimately halted around the 50 mark. In the ensuing four months, MO has found the 50 level to be a region of stiff resistance. The stock has also been struggling with resistance in the form of its 10-week and 20-week moving averages. On the up side, MO seems to have found support in the 46 region, below which the shares have not had a weekly close since last November.

Options pits are crowded with MO speculators today, most notably at the October 47-1/2 call and the December 42-1/2 put. Out-of-the-money call positions in the January 2006 LEAPS series are also quite popular in Tuesday's trading. Before today's volume, the equity's Schaeffer's put/call open interest ratio (SOIR) weighed in at 0.77. Following a post-September-expiration plunge, this reading is lower than 88 percent of the past year's worth of data. While this reading denotes a fair amount of complacency from the options crowd, the latest short-interest numbers suggest otherwise. Last month, the number of MO shares sold short increased by 17 percent to 25 million, for a short-interest ratio of more than four-and-a-half days to cover.

Wall Street analysts are also skeptical of MO, according to the latest findings from Zacks (www.Zacks.com). Of 11 analysts following the stock, there are only six "buy" ratings, leaving four "holds" and a solitary "sell."

Click the following link to see the Weekly Chart of MO Since August 2003 With 10-Week and 20-Week Moving Averages: http://www.schaeffersresearch.com/wire?ID=11183 .

2. Procter & Gamble (NYSE:PG) is back in the news today after the U.S. Food and Drug Administration granted priority review to the company's female testosterone patch Intinsa, which is designed to boost libido in women who have lost both of their ovaries. Yesterday, PG surrendered more than three percent of its value in sympathy with fellow consumer-products concern Colgate-Palmolive (CL) , which issued an earnings warning for the second quarter. This pullback dropped PG shares below their 10-week and 20-week moving averages, but today's recovery may be enough to boost them back above these trendlines.

On the options front, SOIR for PG stands at 0.54, which is just eight percent away from a new low. Call action is continuing in today's session, with speculators trading around 6,000 contracts at the newly front-month October 55 strike call strike. Short interest is negligible despite a modest increase over the last reporting period. The 10.4 million shorted PG shares amount to a short-interest ratio of less than two times the stock's average daily trading volume.

As far as the analyst crowd is concerned, the Street sees little room for downside. This is not surprising, given the rally PG has enjoyed throughout the past year. The current Zacks (www.Zacks.com) readings show eight "buy" or "strong buy" ratings on PG, seven "holds," and zero outright "sells."

Click the following link to see the Weekly Chart of PG Since August 2003 With 10-Week and 20-Week Moving Averages: http://www.schaeffersresearch.com/wire?ID=11183 .

3. Research in Motion Limited (Nasdaq:RIMM) has benefited from new brokerage coverage today. Goldman Sachs Group initiated an "outperform" rating on the handheld manufacturer and computer software concern. Prior to this new rating, RIMM boasted 10 "buys" and four "holds."

Today's news, together with a rallying broader market, has sent the stock almost two percent higher to a new annual peak. RIMM shares are now trading at levels they had not seen since early 2000.

On the sentiment front, the equity's SOIR stands at 1.39. This means that for every 100 open calls among options with less than three months until expiration, there are 139 open puts. While this ratio might seem high on an absolute basis, it is fairly commonplace for RIMM, resting in the 54th annual percentile. Meanwhile, more than seven percent of the security's float, or 8.9 million shares, is sold short. The resultant short-interest ratio of 1.1 is not terribly impressive, but the fact that bears continue to stalk RIMM despite its move to new highs provides slight comfort from our contrarian view.