Portfolio Update
January 17th, 2006
At WhisperNumber.com, we pride ourselves on being able to pick up data sentiment points that others are not able to collect, interpret, and make money from. Our whisper number sentiment data point is simply whether the herd is too bullish or bearish on what earnings will be for each company in our universe. Now we have been able to team up with another pro in the sentiment universe, Phil Erlanger. Mr. Erlanger tracks short interest, options, and technical moves to predict which way stocks are going to move.

By overlaying whisper number's with Erlanger's data, we feel that we have created a great vehicle of buy and sell recommendations through the WhisperNumber Long Short Portfolio. The concept is simple - buy stocks with low sentiment risk and improving technicals and heavy short interest. Conversely, short stocks with high sentiment risk and low short interest and technicals that are long in the tooth.

We will own up to 10 names in the portfolio. At times, we may hold cash if our sentiment reports dictate a vulnerable period or have a heavily short portfolio in such an environment. When we are bullish on the market, then we will have more long ideas.

1/17/06 Portfolio Update: Earnings season is upon us and right out of the gate we have three highly visible releases: Yahoo (YHOO) missed the whisper number, Intel (INTC) missed a low whisper number of 41 cents reporting 40 cents, and International Business Machine (IBM) beat both analysts estimates and the whisper number. We would expect investors to punish INTC and YHOO, and reward IBM when trading begins tomorrow. For now, these stocks are trading down in the after hours markets and pulling futures down too. (For a look at an independent university study proving the greater impact whisper numbers have on stock movement (versus analysts estimates) after earnings announcements, click here.)

Weekly Review:
  1. Linear Technology Corp. (LLTC - Long) reported $0.36. The company has a scheduled conference call tomorrow to discuss earnings.
Keep on the Radar:
  1. Southwest Airlines (LUV - Short) will be reporting before the open on January 18, 2006. Wall Street Estimate is for $0.12 with a Whisper Number of $0.13 and 'high' risk rank.
  2. Motorola Inc. (MOT - Short) will be reporting after the market close on January 19, 2006. Wall Street Estimate is for $0.34 with a Whisper Number of $0.36 and 'high' risk rank.

Changes to Recommendations:

  1. Add eBay Inc. (EBAY - Long) as a long recommendation. The stock is expected to report January 18, 2006 and has a 'Low' Whisper Risk Rating with a high level of short interest based on Erlanger Research.
  2. Add PDL BioPharma, Inc. (PDLI - Short) as a short recommendation. The stock is expected to report earnings on February 27, 2006 and has a 'High' Whisper Risk Rating and low level of short interest based on Erlanger Research.
  3. Establish closing stop for Linear Technology Corporation (LLTC - Long) at $36.27.
  4. Establish closing stop for Convergys Corp. (CVG - Short) at $16.75.
  5. Establish closing stop for 3m Company (MMM - Short) at $82.95.
  6. Establish closing stop for Motorola Inc. (MOT - Short) at $25.51.


Performance Review:


The portfolio will be updated on a weekly basis. The following trading day opening price is used to determine entry/exit levels.

Learn more about the Erlanger Technical and Short rankings. Click here.

 
Questions? Email whisper@quantpartners.com

WhisperNumber.com's Long Short Portfolio is published monthly by Market Sentiment LLC, owner and operator of WhisperNumber.com, thru contributive efforts of long short markets positions provided by Phil Erlanger Research Co., Inc. (http://www.erlanger.com/). WhisperNumber.com's email address is info@whispernumber.com. The address of the web site is http://www.whispernumber.com. This service will soon be integrated with our premium sentiment reports and is currently being offered on a complimentary basis to our registered users.

The Portfolio is based on information and research believed to be reliable, but its accuracy cannot be guaranteed. WhisperNumber's Reports, Letters, and Alerts are for informational purposes only, and are not a recommendation to buy, sell, or hold any security, or that any investment strategy discussed is suitable for all investors. This email does not constitute a solicitation or offer to buy or sell securities. The information contained herein was prepared by Quantitative Partners, Inc. in conjunction with its research providers. There is a very high degree of risk involved in the purchase and sale of securities and WhisperNumber.com and all individuals affiliated with Market Sentiment LLC, including Phil Erlanger Research and Quantitative Partners Inc., assume no responsibilities for the trading and investment results of subscribers. Past results are not indicative of future returns. Reproduction or redistribution in any form is strictly prohibited. The Company, Website and Newsletter are not affiliated with any of the companies it writes about or mentions, nor does it endorse the use of its name in any advertising.