Red Roadmaster Stock Talk June 17 2009

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The Red Roadmaster Talks Stock June 17, 2009

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Red Roadmaster Stock Talk June 17 2009

Transcript of Red Roadmaster Stock Talk June 17 2009

The Red Roadmaster Talks Stock

June 17, 2009

Alert: Stock Talk looks at HealthSpring,Inc. (HS), and Qwest Communications International Inc. (Q) for the 1st time.

Recap of Tuesday’s US Stock Market Action

US stocks slipped yesterday closing on the session lows.

The DJIA shed 107.46 pts (1.25%) closing at 8,504.67, the S&P 500 lost 11.75 points (1.27%) closing at 911.97, the NAS was minus 20.20 pts (1.11%) ending the session at 1,796.18, and he Russell 2000 fell 8.09 (1.6%) to settle at 503.74 on the day.

The S&P 500 is up 34.8% off of the March 12 yr closing low, and declines have been shallow and short-lived as investors are buying the dips. Some analysts that I read are looking for a pullback of 10% off of the recent highs.

The US$ retreated after the Kremlin's top economic adviser said Russia may put part of its currency reserves in bonds issued by Brazil, China and India. A weaker US$ has become a main concern of many investors. Light, sweet Crude Oil was off 15c to settle at US$70.47 bbl on the New York Mercantile Exchange. Gold, Silver, Platinum, soybeans and coffee closed higher on the day. The yield on the benchmark 10-year US T-note fell to 3.68% from 3.72% late Monday.

The economic data reported a smaller-than-expected rise in May's overall Producer Price Index suggests inflation pressure is muted.

Volume and Breadth: volume was light on the NYSE, where about 1.18B/shrs changed hands, below last year's estimated daily average of 1.49B/shrs, and on the NAS, about 2.26B/shr traded, below last year's daily average of 2.28B/shrs. Decliners outpaced advancers on the NYSE by 2,160 to 848, and on the NAS, decliners beat advancers by 1,876 to 753.

Overseas, Japan's Nikkei stock average closed minus 2.9%. Britain's FTSE 100 and Germany's DAX index each rose less than 0.1% and France's CAC-40 was off 0.2%.

Stocks to Watch Today

Adobe Systems Inc. (ADBE), Deidrich Coffee (DDRX), K12, Inc (LRN), HealthSpring,Inc. (HS), 3M Company (MMM), Morgan Stanley (MS), Pfizer Inc. (PFE), and Qwest Communications International Inc. (Q)

Adobe Systems Inc. (ADBE) Up-date 1

June 17, 2009

Paul A. Ebeling, Jr. Analyst

Today let’s look at Adobe Systems Inc. (ADBE), a leading desktop publishing software provider from a Technical POV. The overall analysis after Tuesday’s (June 16, 2009) market action is Bullish; in the near term Neutral, mid-term Bullish, and long term Very Bullish.

**Chart by: http://www.stockta.com

Latest News: Watch Adobe and Morgan Stanley

http://www.marketwatch.com/story/stocks-in-focus-for-wednesday-2009616184700?siteid=yhoof

Tuesday’s Market Action Close 28.17 -.65 Volume 9,997,000/shrs

There is a Bearish Engulfing Candle on June 12, and three Gaps open up between Mar 18 and June 1, 2009 at 19.15/28.30, the near term resistance is 28.35, support at 27.46, and the 50 day (EMA) exponential moving average is 26.66.

This is Adobe Systems Inc. (ADBE): The Company offers business and mobile software and services worldwide. Its Creative Solutions segment provides software tools for professional publishing, Web design and development, professional photography, video production, animation, and motion graphic production, as well as printing visually rich information. The Knowledge Worker segment offers essential applications and services to help enterprises to share information and collaborate various job functions. The company’s Enterprise segment provides server-based enterprise interaction solutions that automate people-centric processes. Its Mobile and Device Solutions segment offers solutions that create compelling experiences through content, user interfaces, and data services on mobile and non-PC devices, such as cellular phones, consumer devices, and Internet connected hand-held devices. The Platform segment provides the Adobe Flash Platform that includes client and developer technologies, which enable the development of products and solutions. Its Print and Publishing segment offers various products and services, which address market opportunities ranging from the publishing needs of technical and business publishing to the company’s OEM printing businesses. The company’s products and services are used by creative professionals, designers, knowledge workers, high-end consumers, OEM partners, developers, and enterprises for creating, managing, delivering, and engaging with content and experiences across multiple operating systems, devices, and media. It distributes its products through distributors and dealers, value-added resellers, systems integrators, independent software vendors, and OEMs; and directly to end users, as well as through its Website at adobe.com. The company also licenses its technology to hardware manufacturers, software developers, and service providers. Adobe Systems was founded in 1982 and is headquartered in San Jose, California.

Competitive Landscape

The US economy heavily influences business spending for software products. The success of programming companies depends heavily on strong technical expertise. The success of packaged-software companies depends on technical expertise and good marketing. Small software companies compete mainly by developing packaged products in small niches or producing custom products for individuals. Many small companies form alliances with larger ones to market their products.

Computer Software Development Industry Forecast The output of US software publishers is forecast to grow at an annual compounded rate of 6 % between 2008 and 2013. Data Sourced: December 2008

Adobe Systems Inc. (HQ) Co-Founder and Co-Chairman Dr. John Warnock Co-Founder and Co-Chairman Charles Geschke 345 Park Avenue San Jose, CA 95110-2704 United States Phone: 408-536-6000 Fax: 408-537-6000 http://www.adobe.com

Deidrich Coffee (DDRX) Up-date 2

June 17, 2009

Paul A. Ebeling, Jr. Analyst

Today let’s look at Deidrich Coffee (DDRX), a US wholesaler and retailer of specialty coffee, from a Technical POV. The overall analysis after Tuesday’s (June 16, 2009) market action is Very Bullish, in the near term Very Bullish, mid-term Bullish, and long term Very Bullish.

**Chart by: http://www.stockta.com

Latest News: K-Cup Production Hike Helps Coffee Stocks Stay Hot

http://finance.yahoo.com/news/KCup-Production-Hike-Helps-indie-15538495.html?.v=2

Tuesday’s Market Action Close 18.40 + 1.99 Volume 229,300/shrs

There is a DOJI on June 11 and five Gaps open up between Mar 23 and Apr 30, 2009 at .35/8.01, the near term resistance is 18.63, support at 16.85, and the 50 day (EMA) exponential moving average is 11.92.

This is Diedrich Coffee Inc (DDRX): is a specialty coffee roaster, wholesaler and retailer. The Company's brands include Diedrich Coffee, Gloria Jean's and Coffee People. The majority of its revenue is generated from wholesale customers located across the United States. Its wholesale operation sells a variety of whole bean and ground coffee, as well as single serve coffee products through a network of office coffee service (OCS) distributors, chain and independent restaurants, coffeehouses, other hospitality operators and specialty retailers. Revenues from 2007 to 2008 increased 26.57%, and 3 year annualized return on investment is 59.1% (annualized), 5 year 32.1%.

Competitive Landscape

Demand for services is highly correlated with demand from consumers to spend on food prepared outside of the home. Spending is traditionally a function of consumer current discretionary income. The current recession has hit consumer pockets hard by through various measures. As the economy speeds up the long-term prospect of consumers spending a larger portion of their wealth on food prepared outside of the home is good. Eating at a restaurant saves on time and provides convenience to utilize one’s time more effectively. Profitability will also be distinguished by a company’s ability to manage fixed investments more wisely such as warehouses for inventory and distribution centers.

Restaurant Sector Performance

Year to date, through April 24th, the S&P Food Distributors Index fell 1.7% vs a 3.7% decline of the S&P 1500 Index. The sub-industry index dropped 26.2% in 2008, vs a 38.2% fall for the S&P 1500.

Diedrich Coffee Inc. (HQ)

Chairman and Chief Director: Paul C Heeschen

28 Executive Park Irvine, CA 92614 United States Phone: 949-260-1600 Fax: 949-260-1611

http://www.diedrich.com

K12, Inc. (LRN) Up-date 1

June 17, 2009

Paul A. Ebeling, Jr. Analyst

Today let’s look at K12, Inc (LRN), LRN wants to make learning easier, from a Technical POV. The overall analysis after Tuesday’s (June 16, 2009) market action is Bullish: in the near term Bullish, mid-term Bullish, and long term Neutral.

**Chart by: http://www.stockta.com

Latest News: K12 Inc. Announces Court Ruling in Favor of the Chicago Virtual Charter School

http://finance.yahoo.com/news/K12-Inc-Announces-Court-bw-15509764.html?.v=1

Tuesday’s Market Action Close 20.16 + 1.16 Volume 309,500/shrs

There is a Bullish Engulfing Candle on June 16 and now Gap open up or down on the Chart, the near term resistance is NIL, support at 19.23, and the 50 day (EMA) exponential moving average is 17.27.

This is K12, Inc (LRN):The company's applications and services enable its corporate customers to implement ethics and compliance management programs. LRN's offerings include Web-based and in-person training, certifications, help lines, and consulting services to help clients disseminate corporate

values, policies, and regulations to employees at all levels. LRN also provides legal research and analysis via a network of attorneys and law professors. The company's clients, drawn from a variety of industries, have included Disney, Dow Chemical, 3M, Procter & Gamble, and Raytheon. Chairman and CEO Dov Seidman founded LRN in 1994

Competitive Landscape

Demand for certification classes is driven by employment trends in the medical, high technology, and manufacturing industries. Demand for classes emphasizing self-fulfillment is driven by personal income. The profitability of individual companies depends on maintaining low operating costs and recruiting enough students. Large companies have advantages in marketing and offering a wide range of classes and services. Small companies can compete effectively through personalized service and customized instruction. The industry is highly labor-intensive: average annual revenue per worker is around US$80,000.

Education and Training Services Industry Forecast The output of US other educational services, an indicator for education and training services, is forecast to increase at an annual compounded rate of 2% between 2008 and 2013. Data Sourced: December 2008

K12, Inc. (HQ)

Ronald J. Packard CFA, Founder, Chief Exec. Office 2300 Corporate Park Drive Suite 200 Herndon, VA 20171 United States Phone: 703-483-7000 Fax: 703-483-7010

http://www.k12.com

HealthSpring Inc. (HS)

June 17, 2009

Paul A. Ebeling, Jr. Analyst

Today, let’s look at HealthSpring,Inc. (HS), a US managed healthcare organization, from a Technical POV. The overall analysis after Tuesday’s (June 16, 2009) market action is Bullish: in the near term Bullish, mid-term Very Bullish, and long term Bullish.

**Chart by: http://www.stockta.com

Latest News: Form 8-K for HEALTHSPRING, INC.

http://biz.yahoo.com/e/090604/hs8-k.html

Tuesday’s Market Action Close 10.36 + .56 Volume 490,800/shrs

There is a Hammer on June 12, and a Gap open up on Mar 18, 2009 at 7.28/7.43, the near term resistance is 10,87, support at 9.58, and the 50 day (EMA) exponential moving average is 9.88.

This is HealthSpring,Inc. (HS): the Company operates as a managed care organization in the United States. It focuses primarily on Medicare, the federal government sponsored health insurance program for the United States citizens aged 65 and older, qualifying disabled persons, and persons suffering from end stage renal disease in the states of Alabama, Florida, Illinois, Mississippi, Tennessee, and Texas. The company also provides management services to healthcare plans and physician partnerships. In addition, HealthSpring’s services include negotiation, monitoring, and quality assurance of contracts with third party healthcare providers; medical management, credentialing, marketing, and product promotion; support services and administration; financial services; and claims processing, and other general business office services. Further, it offers Medicare Part D prescription drug plans to persons who are eligible for Medicare. As of December 31, 2008, the company served 162,000 Medicare members. HealthSpring was founded in 2000 and is headquartered in Franklin, Tennessee.

Competitive Landscape

Demand is driven by the rising costs of providing medical care. The profitability of individual companies depends on efficient operations and the ability to negotiate favorable contracts with healthcare providers. Large companies and organizations have advantages in negotiating contracts with healthcare providers. Small companies can compete successfully only by providing special coverage plans, or in small markets. The industry is highly automated: annual revenue per employee is close to US$1MM. Managed Healthcare Industry Forecast US personal consumption expenditures on health insurance premiums, an indicator for managed healthcare services, are forecast to flatten with an annual compounded growth rate of 0 % between 2008 and 2013. Data Sourced: December 2008

HealthSpring, Inc. (HQ) Herbert A. Fritch Exec. Chairman and Chief Exec. Officer

9009 Carothers Parkway

Building B Suite 501

Franklin, TN 37067

United States

Phone: 615-291-7000

http://www.myhealthspring.com

3M Company (MMM) Up-date 4

June 17, 2009

Paul A. Ebeling, Jr. Analyst

Today let’s look at the 3M Company (MMM), the leader in tape and adhesive manufacturing, from a Technical POV. The overall analysis after Tuesday’s (June 16, 2009) market action is Neutral: in the near term Neutral, mid-term Neutral, and long term Bullish.

**Chart by: http://www.stockta.com

Latest News: 3M contamination case heads to Washington Co. jury

http://finance.yahoo.com/news/3M-contamination-case-heads-apf-15543798.html?.v=1

Tuesday’s Market Action Close 58.41 - .90 Volume 3,791,400/shrs

There is a Bullish Harami on June 12 and one Gap open up on June 1, 2009 at 54.17/57.90, the near term resistance is 59.60, support at 57.88, and the 50 day (EMA) exponential moving average is 57.13

.

This is the 3M Company (MMM): 3M makes everything from masking tape to asthma inhalers. The company has six operating segments: display/graphics, specialty film, traffic control materials; health care (dental and medical supplies, and health IT); safety, security, and protection (commercial care,

occupational health and safety products); electro and communications (connecting, splicing, and insulating products); industrial and transportation (specialty materials, tapes, and adhesives); and consumer and office. Well-known brands include Scotchgard fabric protectors, Post-it Notes, Scotch-Brite scouring products, and Scotch tapes. Sales outside the US account for about two-thirds of 3M's sales.

Top 3M Competitors Avery Dennison Avery Dennison Johnson & Johnson The 3M Company (HQ) Chairman, President, and CEO George W. Buckley 3M Center St. Paul, MN 55144 United States Phone: 651-733-1110 Fax: 651-733-9973 Toll Free: 800-364-3577

http://www.mmm.com

3M Subsidiaries 3M Digital Signage 3M Health Care 3M Health Care Ltd. (UK)

Morgan Stanley (MS) Up-date 2

June 17, 2009

Paul A. Ebeling, Jr. Analyst

Dear Reader,

Let’s have a look at Morgan Stanley (MS), the international investment banking giant, from a Technical POV. The overall analysis after Monday’s (June 16, 2009) market action is Bullish: in the near term Neutral, mid-term Bullish, and long term Bullish.

**Chart by: http://www.stockta.com

Latest News: Morgan Stanley eyes changes in prime-brokerage unit

http://www.reuters.com/article/marketsNews/idESBNG45204920090617?rpc=44

Monday’s Market Action Close 28.10 - .30 Volume 24,485,200/shrs

There is a Bullish Engulfing Candle on June 12 and one Gap open up on April 30, 2009 at 23.24/23.48, the near term resistance is 28.99, support at 27.59, and the 50 day (EMA) exponential moving average is 27.10.

This is Morgan Stanley (MS): The company through its subsidiaries and affiliates provides various financial products and services to corporations, governments, financial institutions, and individuals worldwide. The company operates in three segments: Institutional Securities, Global Wealth Management Group, and Asset Management. The Institutional Securities segment engages in various activities, including capital raising; provision of financial advisory services principally on mergers and acquisitions, divestitures, corporate defense strategies, joint ventures, privatizations, recapitalizations, spin-offs, corporate restructurings, shareholder relations, tender offers, exchange offers, and leveraged buyouts; corporate lending; sales, trading, financing, and market-making activities in equity and fixed income securities and related products comprising foreign exchange and commodities; benchmark indices and risk management analytics; and investment. The Global Wealth Management Group segment provides brokerage and investment advisory services covering various investment alternatives comprising equities, options, futures, foreign currencies, precious metals, fixed income securities, mutual funds, and structured products, unit investment trusts, and managed accounts; financial and wealth planning services; annuity and insurance products; credit and other lending products; cash management services; retirement services; and trust and fiduciary services. Morgan Stanley has a strategic alliance with Mitsubishi UFJ Financial Group, Inc.

Competitive Landscape

Demand is driven by economic activity that results in company mergers, acquisitions, or public financing. The profitability of an investment bank depends on its ability to accurately assess both the value of a business transaction and the readiness of the market to buy the attendant debt or equity. Big firms have an advantage because large customer transactions require firms with substantial financial resources. Small investment banks can compete by participating in syndications and operating in regional markets or specialized industries. Although labor-intensive, the industry produces very high value: average annual revenue per employee at large firms is close to US$1MM.

Investment Banking Industry Forecast The output of US securities, commodity contracts, and investments, an indicator for investment banking, is forecast to grow at an annual compounded rate of 4.1% between 2008 and 2013.

Morgan Stanley (HQ)

Chairman and Chief Exec. Officer John Mack

1585 Broadway New York, NY 10036 United States Phone: 212-761-4000 Fax: 212-761-0086

http://www.morganstanley.com

Morgan Stanley Subsidiaries AMLI Residential

Crescent Real Estate Equities Limited Partnership Morgan Stanley & Co. Incorporated

Pfizer Inc. (PFE) Up-date 3

June 17, 2009

Paul A. Ebeling, Jr. Analyst

Let’s have a look at Pfizer Inc. (PFE), the Giant manufacturer of prescription medicines for humans and animals worldwide, from a Technical POV. The overall analysis after Tuesday’s (June 16, 2009) market action is Neutral: in the near term Neutral, mid-term Neutral, and long term Neutral.

**Chart by: http://www.stockta.com

Latest News: Adult stem cells are a promising market

Amid controversies over embryonic stem cell research, drugs using adult cells are already bearing fruit. http://money.cnn.com/2009/06/16/technology/adult_stem_cell_therapy.fortune/index.htm?source=yahoo_quote

Tuesday’s Market Action Close 14.16 +.03 Volume 45,681,900/shrs

There is a Homing Pigeon on June 16 and a Gap open up on May 4, 2009 at 13.58/13.62, the near term resistance is 14.47, support at 13.66, and the 50 day (EMA) exponential moving average is 14.40.

This is Pfizer Inc. (PFE): The Company engages in the discovery, development, manufacture, and marketing of prescription medicines for humans and animals worldwide. Its Pharmaceutical segment offers Lipitor for elevated cholesterol levels in the blood; Norvasc for hypertension; Caduet for cardiovascular events; Chantix/Champix for smoking cessation; Lyrica for neuropathic pain; Geodon/Zeldox, a psychotropic agent; and Aricept for Alzheimer’s disease. It also provides Celebrex for arthritis pain, and inflammation and acute pain; Vfend for esophageal candidiasis and blood stream infections; Zyvox for bacterial infections; and Selzentry/Celsentri for adults infected with only CCR5-tropic HIV-1 detectable. In addition, this segment provides Viagra for erectile dysfunction; Detrol and Toviaz for overactive bladder; Camptosar for metastatic colorectal cancer; Sutent, an oral multi-kinase inhibitor; Xalatan/Xalacom for open-angle glaucoma and ocular hypertension; and Genotropin for growth disorders. The company’s Animal Health segment offers parasiticides, anti-inflammatories, antibiotics, vaccines, antiemetics, and anti-obesity agents. It also provides Revolution/Stronghold for dogs and cats; Rimadyl for pain and inflammation associated with canine osteoarthritis and soft tissue orthopedic surgery; Clavamox/Synulox for skin and soft tissue infections; RespiSureOne/StellamuneOne to prevent pneumonia in swine; Bovi-Shield Gold for reproductive and respiratory protection; Dectomax, an injectable and pour-on formulations; Draxxin, an antibiotic for infections in cattle and swine; and Excede to treat infections in dairy cows, beef cattle, and swine. Pfizer Inc. also involves in contract manufacturing and bulk pharmaceutical chemicals businesses. It serves doctors, nurse practitioners, physician assistants, pharmacists, hospitals, pharmacy benefit managers, managed care organizations, and government agencies. Pfizer, Inc. was founded in 1849 and is headquartered in New York, New York.

Competitive Landscape

The industry is marked by rapid advances in scientific knowledge that produce ever-more effective medicines. Profitability is determined mainly by the ability to discover new drugs. The industry is dominated by the large manufacturers/marketers that manufacture drugs, have large research operations, and also have large clinical testing, marketing, and distribution capabilities. Small companies are mainly research operations or manufacturers of non-prescription products. Because of the high value of the product, average revenue per employee is a very high US$600,000.

Pharmaceutical Manufacture and Sale Industry Forecast The output of US drug manufacturing is forecast to grow at an annual compounded rate of 8 % between 2008 and 2013. Data Sourced: December 2008

Pfizer Inc. (HQ)

Chairman, Chief Exec. Officer Jeffrey B. Kindler 235 East 42nd Street New York, NY 10017 United States Phone: 212-573-2323 Fax: 212-573-7851 Web Site: http://www.pfizer.com

Pfizer Subsidiaries Pfizer Health Solutions Inc Pfizer Ireland Pharmaceuticals Pfizer Limited

Qwest Communications International Inc. (Q)

June 17, 2009

Paul A. Ebeling, Jr. Analyst

Today, let’s look at Qwest Communications International Inc. (Q) spaning the globe with its high-capacity broadband fiber-optic network from a Technical POV. The overall analysis after Tuesday’s (June 16, 2009) market action is Neutral: in the near term Neutral, mid-term Neutral, and long term Neutral.

**Chart by: http://www.stockta.com

Latest News: Qwest to Integrate DSL into Smart Grid Use of DSL Network Reduces Costs, Speeds Smart Grid Deployment

http://finance.yahoo.com/news/CURRENT-Qwest-to-Integrate-bw-15535336.html?.v=1

Tuesday’s Market Action Close 4.03 + .15 Volume 15,951,100/shrs

There is a DOJI on June 12, and one Gap open up between Apr 29 at 3.61/3.62, the near term resistance is 4.14, support at 4.03, and the 50 day (EMA) exponential moving average is 4.04.

This is Qwest Communications International Inc. (Q): the company is among the leading US local phone providers and serves nearly 12 million access lines in a 14-state region stretching from Arizona north to Wyoming and east to Minnesota. Qwest also provides long-distance and international calling as well as broadband data, voice, and video services to business customers. The company's wholesale network extends outside of its local service area linking major global metropolitan areas and providing high-volume transmission capacity and other wholesale services to other carriers and resellers.

Competitive Landscape

Demand is driven by technological innovation and by growth in business activity. The profitability of individual companies depends on efficient operations and good marketing. Large companies have big economies of scale in providing a highly automated service to large numbers of customers, and have the financial resources required to build and maintain a large network. Smaller companies can compete effectively only in small markets or by providing specialty services. Because of the large degree of automation, average revenue per employee is a high US$300,000. Telecommunication Services Industry Forecast The output of US telecommunications is forecast to grow at an annual compounded rate of 4% between 2008 and 2013. Data Sourced: December 2008

Qwest Communications International Inc. (HQ)

Edward A. Mueller Exec. Chairman and Chief Exec. Officer

1801 California Street Denver, CO 80202 United States Phone: 303-992-1400 Fax: 303-896-8515

http://www.qwest.com

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