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Monday, October 23, 2006

Barron's Digest October 23, 2006 Issue

Orcale is getting its second wind. Some Wall St. analysts believe that the stock will rise another 25% over the next year. The company might make more acquisitions looking at companies like Webex and BusinessObjects. This might slow share price growth near-term.

Jones Apparel put itself on the block this year, but the $35 price was considered too high. If the company can revamp its aging brands, it may be worth even more. Federated Department Stores are 20% of Jones' sales. As Federated cuts underperforming stores, margins for Jones Apparel could rise.

Agilent Techologies isn't one of the tech glamour companies, but its solid business and outlook make it attractive. With a strong hold in the electronics testing market, the stock could rise another 15% over the next year.

Shares of Barnes & Noble have not done well recently. Wall St. is concerned about the company's growth opportunities. But, the chain has a strong market position and a lot of cash. This could make it attractive to a private equity firm. Shareholders would probably get a 25% premium.

Nokia's stock is out of favor. It has not put out the most attractive phones like the Motorola RAZR, but the company has kept its prices up in Asia, and the company's net is expected to rise 18% next year compared to estimates of 15% for Motorola.

While many tech companies like Intel and Hewlett-Packard are trimming jobs, and other companies like SAP are stuggling with revenue, Google keeps right on growing and hiring. And, Apple finds itself in a similarly enviable position. These two tech stocks are bucking an overall downward trend in the market.

Value Line Income & Growth Fund has returned an average of 13% a year over the lasts three years. Its largest holdings are GE, Microsoft, Pfizer, HSBC, Amgen, Sanofi Aventis, Triad Hospitals, Telecom New Zealand, Anheuser Busch, and Ameriprise Financial.

Douglas A. McIntyre

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