Wiser Trader Stocks and Options Newsletter

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Issue No. 76 May 8, 2006 Prescott, Arizona Systems@WiserTrader.com

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1.0 Trading

Market momentum is strongly positive.

1.1 Advance

This week, all the major indices advanced, as shown in Figure 1.

FIGURE 1

© 2006 WiserTrader.com, LLC. Members of wisertrader.com are neither licensed brokers nor licensed advisors. Trades discussed represent recommendations made by the editor for the wisertrader.com portfolio. The newsletter and web site are for information only and should not be considered as personal advice. While it is believed that the posted information is factual, mistakes can be made in transcription. Investors should trade stocks only after verifying all information and consulting with a licensed broker or adviser. WiserTrader.commarkets third party trading systems but has no other affiliation with trading system companies.

1.2 Filter Studies

Continuing with filter performance studies, the latest 1 year period is shown at the bottom of Table 1. Details of the filters can be found on the web site. Currently we are tracking filter performance with the S&P 500 Index 30-day SMA (simple moving average) relative to its 200-day SMA 1 month prior to the dates listed.

Table 1

1 Year Filter Performance Using No Trailing Stop

Year Ending	1 Year S&P500 Gain	Month Ago S&P 500 SMA 30 vs SMA 200	Growth $15-$40 Filter Gain	Growth >$40 Filter Gain	Absolute Value Filter Gain	Relative Value Filter Gain
9/02/05	9.4%	+2.8%	60.1%	40.7%	19.3%	50%
9/30/05	8.6%	+1.8%	25.4%	61.4%	12.3%	24.1
11/04/05	8.0%	-0.1%	8.2%	14.8%	4.4%	-0.6%
12/02/05	6.2%	+1.9%	24.6%	9.6%	17.0%	34.7%
01/06/06	8.2%	+4.1%	39.8%	50.3%	27.8%	28.3%
02/03/06	6.1%	+4.2%	34.8%	60.7%	11.5%	34.3%
03/03/06	5.7%	+3.5%	32.7%	26.4%	11.0%	29.7%
04/07/06	9.5%	+3.3%	25.2%	61.2%	16.1%	18.4%
04/28/06	13.2%	+4.0%	95.0% *	19.9%	12.2%	32.0%

* Only 2 stocks were filtered for this group

The data continues to confirm that stocks selected by either filter do best when the S&P 500 remains several percent above its 200-day SMA for the most recent month. The performance shown is for cases where no trailing stops were used.

1.3 Trailing Stop Settings

Table 2 shows how typical profits change as the trailing stop is widened from -10% to -100%, essentially no stop setting at all. One factor in such performance is that the S&P 500 has been in a bull market over the past year, all be it with a saw tooth rising wedge pattern. Another factor is the quality of the filters themselves.

Stocks were filtered 1 year ago just after the S&P 500 bottomed out. In some cases, a fixed nominal trailing stop setting X% can be improved upon by applying a trailing stop to each individual stock based on its highest percentage gain. The variable value applied to stocks individually is,

Variable trailing stop percentage = Highest_%Gain / 3 - X%

This effectively tightens the trailing stop as the stock price rises in order to preserve gains. The variable trailing stop percentage is not allowed to expand wider than -X% or any narrower than -10%. A variable trailing stop was, in some cases, superior to a fixed trailing stop over the past year. The improvement is more likely when the trailing stop setting is narrower than -35% in an up trending market. Results depend on market behavior.

Table 2

1-Year %Gains with Variable and Fixed Trailing Stop Settings

	Absolute Value		Relative Value		Growth $15 to $40		Growth > $40
“X“ Nominal Stop Setting (%)	Variable Trailing Stop	Fixed Trailing Stop	Variable Trailing Stop	Fixed Trailing Stop	Variable Trailing Stop	Fixed Trailing Stop	Variable Trailing Stop	Fixed Trailing Stop
-10	18.6%	18.6%	12.8%	12.8%	90.9%	90.9%	5.9%	5.9%
-15	14.4%	15.1%	15.7%	15.7%	90.9%	90.9%	15.0%	15.0%
-20	16.6%	16.0%	23.6%	15.0%	89.2%	89.2%	14.6%	13.1%
-25	16.0%	16.0%	32.0%	28.1%	89.2%	89.2%	16.9%	14.0%
-30	16.0%	16.0%	32.0%	32.0%	89.2%	89.2%	16.1%	12.3%
-35	12.2%	16.0%	32.0%	32.0%	89.2%	89.2%	19.8%	17.4%
-40	12.2%	16.0%	32.0%	32.0%	89.2%	89.2%	18.6%	16.2%
-50	12.2%	16.0%	32.0%	32.0%	95.0%	95.0%	19.9%	19.9%
-60	12.2%	12.2%	32.0%	32.0%	95.0%	95.0%	19.9%	19.9%
-70	12.2%	12.2%	32.0%	32.0%	95.0%	95.0%	19.9%	19.9%
-80	12.2%	12.2%	32.0%	32.0%	95.0%	95.0%	19.9%	19.9%
-90	12.2%	12.2%	32.0%	32.0%	95.0%	95.0%	19.9%	19.9%
-100	12.2%	12.2%	32.0%	32.0%	95.0%	95.0%	19.9%	19.9%

Applying trailing stops to individual stocks is most easily done by putting the data and formulas in an Excel spreadsheet and download XLQPlus to retrieve stock prices automatically from Yahoo and MSN. The spreadsheet dynamically calculates stop loss settings and when its time to buy, hold or sell. Efforts are underway to make such an automatic spreadsheet available as a free download at http://www.wisertrader.com/excel.php . The effort involved has to do with providing a clear description of what the spreadsheet is doing and how to use it. Expect the spreadsheet to become available by next week.

Discussions of the 5-index momentum indicator will continue next week.

2.0 Market Analysis

All ten major sectors advanced this week accompanied by a slight lowering of treasury yields. Advances were led by blue chips. Employment data indicated a continued strong economy without inflation fostering wage increases. This gave more hope that the Fed would reach the end of rate tightening sooner rather than later.

Key industry ETF’s in Table 2A are Biotech and Semiconductors, which confirm the NASDAQ. Transportation confirms the Dow Jones Industrial Average according to Dow Theory. Banking and Financials are confirming indicators for the S&P 500. Gold and Housing are respective indicators for the inverse health of the currency (inflation) and the capacity for consumer spending.

Table 2A

Indices, Key Industry ETF’s and Sector SPDR’s

	1 month	1 wk ago	2 wks ago	3 wks ago	4 wks ago
Dow Jones Industrial Index	1.3%	-0.9%	0.2%	1.9%	0.2%
NASDAQ Composite Index	0.7%	1.4%	-0.9%	0.7%	-0.6%
S & P 500 Index	0.9%	-0.2%	-0.1%	1.7%	-0.5%
NYSE Composite Index	1.4%	-1.0%	0.1%	2.8%	-0.5%
Russell 2000 Index	1.8%	0.7%	-1.0%	2.8%	-0.7%
HGX, Phil. Housing Index	-5.9%	0.7%	-4.6%	1.7%	-3.6%
IYR, Real Estate	1.0%	-1.1%	-0.4%	3.5%	-2.7%
GLD, GOLD	16.0%	4.5%	3.0%	6.2%	1.6%
RKH, Banking	2.0%	-4.1%	4.2%	2.0%	0.0%
IYT, Transportation	5.7%	0.8%	-1.0%	1.2%	-0.9%
SMH, Semiconductors	3.2%	-0.7%	0.6%	1.7%	-0.2%
BBH, Biotechnology	-5.3%	7.9%	-4.6%	-2.7%	1.1%
OIH, Oil Infrastructure	9.5%	4.8%	-3.1%	7.3%	0.4%
XLE, Energy	6.3%	1.9%	-4.4%	7.0%	0.8%
XLU, Utilities	4.9%	-1.7%	0.2%	3.3%	-1.4%
XLB, Materials	5.6%	1.9%	-2.6%	4.4%	0.4%
XLI, Industrial	5.1%	-0.1%	-1.0%	3.0%	-0.3%
XLK, Technology	-1.5%	2.1%	-1.0%	-0.2%	-0.7%
XLV, Healthcare	-1.6%	0.5%	-0.5%	0.5%	-0.8%
XLF, Financials	4.8%	-2.7%	2.5%	2.0%	-0.3%
XLP, Consumer Staples	2.8%	-2.0%	1.8%	0.7%	-0.6%
XLY, Consumer Discretionary	2.2%	-0.5%	1.2%	0.2%	-0.8%

The VIX and VXN volatility indexes are listed in Table 2B.

Table 2B

Volatility

Indicator	Current	Last Week	2 Weeks Ago	Complacent	Cautious
VIX **	11.6	11.6	11.6	< 20	> 50
VXN ***	14.4	15.5	15.9	< 30	> 70
Below 20 day SMA = Short-term buy signal. * Below 20 day SMA = Short-term buy signal.

Figure 2 compares the major averages with key ETF’s and Sector SPDR’s.

FIGURE 2

Table 2C

Market Summary

Industries are listed according to the Dow Jones Classification System

3.0 Procedure

A temporary disruption in one of our information channels prevents us from adding new picks this week. The existing picks are sorted according to their most recent performance.

The following watch lists contain stock candidates for consideration. They are not necessarily trades. Categories include checklists for insider buying and cash rich companies, as well as, filters that employ stock picking methods used by master traders. The information is not meant to imply any endorsement or sponsorship by these master traders.

Current stock rankings are based on the degree to which stocks are overbought or over sold based on the 28-period Williams %R for the past two trading days. Two columns are labeled “%R1” and “%R2” with “%R2” indicating the Williams %R for the most recent trading day. Of course, values more negative than -80 are oversold and those less negative than -20 are overbought.

One should keep in mind that oversold stocks are not necessarily ready to move upward. They could very well be in a condition of continuous decline. The lists are meant to serve as a starting point for further due diligence.

A column labeled “Monthly % Gain” was added to show the inverse relationship between price action over the past month and the Williams %R. The change from a 10-period Williams %R with a weekly percent change to a 28-period Williams %R with a monthly percent change was done to reflect a longer term view.

The “Reference” is the date that a stock passed the indicated filter and was first added to or returned to the list. The “% Change” is how the price has changed since the reference date. Stocks that are down 10% or more after being listed are removed for a period of about two months. The “% from Max” is the percentage the price has declined from the maximum price reached since the reference date. Stocks that are down 8% from their highs after being listed are flagged in yellow. Stocks that are down 15% from their highs after being listed are removed for two months. More information on filters is available on the web site.

A performance summary of filtering techniques for checklists and master trader selection methods is given in Table 3A.

Table 3A

Stock Filter Summary

Filter	Avg. % Change Since Listed	Avg. % Change Friday	1 Month	1 Week Ago	2 weeks Ago	3 Weeks Ago	4 Weeks Ago
Net Insider Buying	3.8%	2.3%	1.8%	-0.2%	-0.1%	1.7%	0.3%
Cash Rich Companies	3.9%	1.8%	3.8%	3.2%	0.8%	1.1%	-1.4%
Price to Free Cash Flow	16.1%	5.3%	5.2%	4.0%	-2.4%	6.3%	-1.8%
Growth Momentum	20.0%	1.7%	5.0%	3.6%	-3.1%	4.6%	-0.1%
Lynch	32.7%	1.0%	5.9%	2.8%	0.6%	3.5%	-1.3%
Buffett	31.7%	1.1%	3.7%	2.8%	-1.4%	3.4%	-1.0%
Graham	16.8%	1.0%	3.3%	1.9%	-0.2%	3.0%	-1.4%
Templeton	6.4%	1.1%	0.9%	0.3%	-0.1%	1.6%	-1.0%
Zweig	9.0%	1.2%	4.5%	2.7%	-2.4%	4.0%	0.2%
Average	15.6%	1.8%	3.8%	2.3%	-0.9%	3.3%	-0.8%

Key

Passed Recent Filter

Price declined by half of stop loss setting

Oversold based on Williams %R (%R2 is most recent)

Overbought based on Williams %R (%R2 is most recent)

Companies that have experienced net insider buying within the past 6 months of 5% or more of issued stock are listed in Table 3B. These stocks should also appear in one of the master trader screens or meet additional screening criteria before being given serious consideration. This list is a mixture of stocks that are optionable and those that are not.

Table 3B

Net Insider Buying Check List

Stock	Reference	% Chg	Company	Sector	Industry	% from Max	Monthly % Gain	%R1	%R2
CLRT	03/24/06	-8.9%	Clarient, Inc.	Technology	Scientific & Technical Instruments	-12.1%	-4.7%	-100	-95
EQS	04/13/06	0.0%	Equus II Incorporated	Financial	Investment Services	-6.1%	-4.7%	-94	-89
RGN	03/17/06	0.0%	RegeneRx Biopharmaceut.	Health Care	Biotechnology & Drugs	-10.9%	-5.8%	-55	-55
NXTM	03/17/06	0.0%	NxStage Medical, Inc.	Health Care	Biotechnology & Drugs	-8.0%	4.8%	-49	-49
MMLP	11/25/05	0.0%	Martin Midstream Partners L.P.	Transportation	Water Transportation	-2.8%	0.5%	-28	-26
LXU	12/23/05	35.4%	LSB Industries, Inc.	Basic Materials	Chemical Manufacturing	-1.7%	16.8%	-8	-8
TWI	04/21/06	0.0%	Titan International, Inc.	Consumer Cyclical	Auto & Truck Parts	0.0%	10.6%	0	0

Companies with net cash positions that comprise at least 40% of their share price are listed in Table 3C. These stocks should also appear in one of the master trader screens or meet additional screening criteria before being given serious consideration. Again, this list is a mixture of stocks that are optionable and those that are not.

Table 3C

Capital Rich Companies Check List

Stock	Reference	% Chg	Company	Sector	Industry	% from Max	Monthly % Gain	%R1	%R2
WSC	03/11/06	-0.5%	Wesco Financial Corporation	Conglomerates	Conglomerates	-0.9%	-0.7%	-67	-31
SCIX	04/07/06	8.3%	Scailex Corp., Ltd. (USA)	Technology	Computer Networks	0.0%	8.3%	0	0

Table 3D was added to contain companies having a low price to free cash flow (P-FCF) less than 5. Companies having P-FCF less than 10 are typically capable of financing the purchase of all their outstanding shares of stock.

Table 3D

Price to Free Cash Flow Companies Check List

Stock	Reference	% Chg	Company	Sector	Industry	% from Max	Monthly % Gain	%R1	%R2
LNX	03/31/06	-2.7%	Lenox Group Inc.	Consumer Non-Cyclical	Personal & Household Products	-11.3%	-6.5%	-73	-71
KWD	03/04/06	20.5%	Kellwood Company	Consumer Cyclical	Apparel/Accessories	-4.9%	2.5%	-51	-48
MOVI	03/24/06	30.5%	Movie Gallery, Inc.	Services	Recreational Activities	0.0%	18.5%	-46	-3

For the Peter Lynch style screen in Table 3E, the number of selections is reduced by selecting only optionable stocks having P/E’s less than 30.

Table 3E

Peter Lynch Value Watch List

Stock	Reference	% Chg	Company	Sector	Industry	% from Max	Monthly % Gain	%R1	%R2
CAE	04/21/06	1.1%	Cascade Corporation	Capital Goods	Misc. Capital Goods	-1.9%	-17.7%	-76	-76
AZN	02/03/06	16.3%	AstraZeneca PLC (ADR)	Health Care	Major Drugs	-2.2%	6.6%	-30	-30
KOF	04/29/05	48.1%	Coca-Cola FEMSA, S.A. (ADR)	Consumer Non-Cyclical	Beverages (Non-Alcoholic)	0.0%	3.6%	-12	-16
SKM	02/07/05	35.7%	SK Telecom Co., Ltd. (ADR)	Services	Communications Services	0.0%	15.5%	-10	-10
TM	12/13/04	64.6%	Toyota Motor Corporation (ADR)	Consumer Cyclical	Auto & Truck Manufacturers	0.0%	8.2%	-3	-3
PKX	02/17/06	33.4%	POSCO (ADR)	Basic Materials	Iron & Steel	0.0%	5.3%	-2	-2
BTI	08/12/05	29.7%	British American Tobacco (ADR)	Consumer Non-Cyclical	Tobacco	0.0%	7.7%	-1	-1

For the Growth Momentum screen in Table 3F, the number of selections is reduced by selecting only optionable stocks having P/E’s less than 30.

Table 3F

Growth Momentum Watch List

Stock	Reference	% Chg	Company	Sector	Industry	% from Max	Monthly % Gain	%R1	%R2
DNR	03/03/06	13.8%	Denbury Resources Inc.	Energy	Oil & Gas Operations	-10.1%	1.1%	-69	-73
SM	03/17/06	1.9%	St. Mary Land & Exploration Co.	Energy	Oil & Gas Operations	-9.1%	-0.2%	-66	-66
HCC	10/21/05	22.9%	HCC Insurance Holdings, Inc.	Financial	Insurance (Property & Casualty)	-4.0%	0.1%	-64	-64
WSO	11/25/05	7.7%	Watsco, Incorporated	Capital Goods	Misc. Capital Goods	-9.1%	-0.3%	-63	-63
CHE	05/06/05	45.4%	Chemed Corporation	Services	Business Services	-7.9%	-3.4%	-63	-63
AHC	02/03/06	0.0%	Amerada Hess Corporation	Energy	Oil & Gas - Integrated	-5.6%	-0.1%	-56	-56
APC	02/10/06	0.0%	Anadarko Petroleum Corporation	Energy	Oil & Gas Operations	-6.1%	4.3%	-53	-53
LM	08/12/05	8.8%	Legg Mason, Inc.	Financial	Investment Services	-13.0%	-5.1%	-55	-52
BEN	11/04/05	2.7%	Franklin Resources, Inc.	Financial	Investment Services	-9.6%	-1.5%	-43	-43
ENDP	02/17/06	6.6%	Endo Pharmaceuticals	Health Care	Biotechnology & Drugs	-4.9%	1.0%	-42	-42
ET	10/21/05	46.0%	E*TRADE FINANCIAL Corporation	Financial	Investment Services	-5.3%	-3.1%	-39	-39
GS	04/21/06	-0.9%	Goldman Sachs Group, Inc.	Financial	Investment Services	-0.9%	2.1%	-32	-34
UIC	03/17/06	22.2%	United Industrial Corp.	Capital Goods	Aerospace and Defense	-2.9%	10.5%	-22	-23
GRMN	03/03/06	28.1%	Garmin Ltd.	Technology	Communications Equipment	-1.7%	15.2%	-21	-21
SYT	04/08/05	36.0%	Syngenta AG (ADR)	Basic Materials	Chemical Manufacturing	-1.2%	4.0%	-16	-16
JEF	04/21/06	2.0%	Jefferies Group, Inc.	Financial	Investment Services	-1.2%	11.7%	-15	-16
OVTI	03/17/06	25.3%	OmniVision Technologies	Technology	Semiconductors	-1.4%	10.2%	-16	-16
CHB	02/17/06	6.4%	Champion Enterprises, Inc.	Capital Goods	Construction Services	-0.2%	6.2%	-10	-10
PCU	12/02/05	49.2%	Southern Copper Corporation (USA)	Basic Materials	Metal Mining	0.0%	10.9%	-9	-9
BHP	09/09/05	51.7%	BHP Billiton Limited (ADR)	Basic Materials	Metal Mining	0.0%	12.8%	-4	-4
RIO	03/31/06	15.3%	Companhia Vale do Rio Doce (ADR)	Basic Materials	Metal Mining	0.0%	14.9%	-2	-2
WCC	02/10/06	48.6%	WESCO International, Inc.	Technology	Electronic Instruments & Controls	0.0%	16.6%	-1	-1

The filter for Warren Buffet style stock picking in Table 3G is for the intermediate to long term. Two requirements were added. One was to include only optionable stocks in order to find LEAPS opportunities. The other requirement was to include only those stocks having a PE of 17 or less.

Table 3G

Warren Buffett Value Watch List

Stock	Reference	% Chg	Company	Sector	Industry	% from Max	Monthly % Gain	%R1	%R2
DHI	04/13/06	-9.9%	D.R. Horton Inc.	Capital Goods	Construction Services	-12.9%	-13.8%	-99	-85
ASH	10/28/05	22.8%	Ashland Inc.	Capital Goods	Construction Services	-11.9%	-4.7%	-80	-80
NKE	09/23/05	0.3%	NIKE, Inc.	Consumer Cyclical	Footwear	-10.8%	-2.5%	-79	-79
TOL	02/17/06	3.7%	Toll Brothers, Inc.	Capital Goods	Construction Services	-13.9%	-4.0%	-78	-78
RI	09/02/05	39.4%	Ruby Tuesday, Inc.	Services	Restaurants	-6.2%	-3.7%	-77	-77
ACS	04/29/05	14.2%	Affiliated Computer Services, Inc.	Technology	Computer Services	-14.2%	-8.9%	-78	-77
DSPG	02/07/05	6.7%	DSP Group, Inc.	Technology	Communications Equipment	-11.2%	-5.2%	-70	-70
HDI	10/14/05	3.3%	Harley-Davidson, Inc.	Consumer Cyclical	Recreational Products	-8.9%	-3.1%	-63	-63
THO	04/15/05	94.0%	Thor Industries, Inc.	Capital Goods	Mobile Homes & RVs	-6.6%	-6.1%	-58	-58
MVK	04/28/06	4.7%	Maverick Tube Corporation	Capital Goods	Construction - Supplies and Fixtures	0.0%	4.4%	-44	-49
SCHN	02/10/06	29.6%	Schnitzer Steel Industries, Inc.	Basic Materials	Iron & Steel	-7.3%	-4.7%	-48	-48
RS	04/15/05	143.1%	Reliance Steel & Aluminum	Basic Materials	Misc. Fabricated Products	-2.7%	0.9%	-38	-38
EOG	04/13/06	6.0%	EOG Resources, Inc.	Energy	Oil & Gas Operations	-2.9%	5.9%	-72	-27
OXY	03/03/06	10.0%	Occidental Petroleum Corporation	Energy	Oil & Gas Operations	-2.4%	9.8%	-23	-23
NUE	04/15/05	139.9%	Nucor Corporation	Basic Materials	Iron & Steel	-1.5%	8.0%	-21	-22
FNF	10/21/05	17.5%	Fidelity National Financial	Financial	Insurance (Property & Casualty)	-1.2%	19.3%	-19	-19
ANF	03/03/06	6.1%	Abercrombie & Fitch Co.	Services	Retail (Apparel)	0.0%	12.3%	-15	-16
ABFS	04/29/05	37.7%	Arkansas Best Corporation	Transportation	Trucking	-4.5%	6.2%	-13	-13
AEOS	03/10/06	13.3%	American Eagle Outfitters	Services	Retail (Apparel)	-0.8%	11.2%	-10	-11
AH	02/03/06	27.4%	Armor Holdings, Inc.	Capital Goods	Aerospace and Defense	-0.3%	5.6%	-9	-10
PCU	02/10/06	20.5%	Southern Copper Corporation (USA)	Basic Materials	Metal Mining	0.0%	10.9%	-9	-9
UNT	03/03/06	12.2%	Unit Corporation	Energy	Oil & Gas Operations	0.0%	8.4%	-8	-9
RCII	10/21/05	74.5%	Rent-A-Center, Inc	Services	Rental & Leasing	0.0%	8.3%	-7	-7
STLD	12/16/05	96.7%	Steel Dynamics, Inc.	Basic Materials	Iron & Steel	0.0%	19.0%	-4	-4
JBHT	03/31/06	19.4%	J.B. Hunt Transport Services, Inc.	Transportation	Trucking	0.0%	13.5%	-2	-2
BTI	12/30/05	16.0%	British American Tobacco (ADR)	Consumer Non-Cyclical	Tobacco	0.0%	7.7%	-1	-1
CCRT	12/30/05	6.8%	CompuCredit Corporation	Financial	Consumer Financial Services	-1.9%	10.9%	-1	-1

Stocks from Benjamin Graham’s style of utility investing are listed in Table 3H. A requirement was added to include only those stocks having a PE of 17 or less.

Table 3H

Benjamin Graham Utility Watch List

Stock	Reference	% Chg	Company	Sector	Industry	% from Max	Monthly % Gain	%R1	%R2
WGL	12/23/05	-3.0%	WGL Holdings, Inc.	Utilities	Natural Gas Utilities	-5.9%	-0.1%	-61	-61
PGN	01/10/05	-2.1%	Progress Energy, Inc.	Utilities	Electric Utilities	-5.7%	0.8%	-55	-55
OKE	11/11/05	21.3%	ONEOK, Inc.	Utilities	Natural Gas Utilities	-3.2%	-1.6%	-43	-54
EON	03/10/06	9.1%	E.ON AG (ADR)	Utilities	Electric Utilities	-2.0%	9.9%	-21	-21
UGI	12/30/05	12.6%	UGI Corporation	Utilities	Natural Gas Utilities	-0.9%	9.1%	-14	-14
VVC	03/03/06	5.2%	Vectren Corporation	Utilities	Natural Gas Utilities	-0.7%	1.0%	-12	-12
SRE	01/10/05	29.9%	Sempra Energy	Utilities	Natural Gas Utilities	-3.6%	2.3%	-11	-11
ATG	10/21/05	9.5%	AGL Resources Inc.	Utilities	Natural Gas Utilities	-0.4%	2.7%	-9	-9
ATO	04/01/05	1.8%	Atmos Energy Corporation	Utilities	Natural Gas Utilities	-7.9%	4.2%	-5	-5
UU	06/10/05	4.8%	United Utilities PLC (ADR)	Utilities	Electric Utilities	0.0%	3.6%	-4	-4
KEP	01/10/05	96.2%	Korea Electric Power Corporation (ADR)	Utilities	Electric Utilities	0.0%	4.5%	-2	-3

Optionable stocks from John Templeton’s style of investing are listed in Table 3I.

Table 3I

John Templeton Watch List

Stock	Reference	% Chg	Company	Sector	Industry	% from Max	Monthly % Gain	%R1	%R2
COH	04/13/06	-4.9%	Coach, Inc.	Consumer Cyclical	Apparel/Accessories	-9.5%	-9.9%	-94	-94
FLIR	04/28/06	-0.4%	FLIR Systems, Inc.	Capital Goods	Aerospace and Defense	-0.4%	-14.8%	-84	-84
BBBY	04/07/06	-5.1%	Bed Bath & Beyond Inc.	Services	Retail (Specialty Non-Apparel)	-5.1%	-0.1%	-76	-81
TOL	03/03/06	-6.5%	Toll Brothers, Inc.	Capital Goods	Construction Services	-13.9%	-4.0%	-78	-78
HDI	02/24/06	-3.2%	Harley-Davidson, Inc.	Consumer Cyclical	Recreational Products	-4.7%	0.0%	-63	-63
ORLY	01/20/06	9.6%	O'Reilly Automotive, Inc.	Services	Retail (Specialty Non-Apparel)	-8.3%	-5.7%	-63	-63
AMSG	10/14/05	5.5%	AmSurg Corp.	Health Care	Healthcare Facilities	-9.8%	0.2%	-57	-57
EWBC	12/30/05	8.2%	East West Bancorp, Inc.	Financial	Regional Banks	-3.4%	6.1%	-45	-45
JNJ	02/17/06	-0.6%	Johnson & Johnson	Health Care	Major Drugs	-3.8%	0.2%	-46	-44
HHS	10/28/05	7.0%	Harte-Hanks, Inc.	Services	Printing & Publishing	-9.1%	4.4%	-41	-41
LOW	11/18/05	-1.0%	Lowe's Companies, Inc.	Services	Retail (Home Improvement)	-5.9%	-0.1%	-33	-33
CHD	11/18/05	10.5%	Church & Dwight Co., Inc.	Consumer Non-Cyclical	Personal & Household Products	-1.7%	3.6%	-29	-29
SNV	05/27/05	-4.9%