INVESTools Advisory
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In This Issue:

1. Toral: "Prepare for a Good 2002" (DYII)
2. A Leader in Telecom's Eventual Rebound (ADCT)
3. Rip-Roaring Returns from the Post-September 2001 Rebound
(EMC)
4. Rex Stores Still a Bargain (RSC)
5. Enron Debt Woes Bad News for Bank (JPM)


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INVESTools Advisory
Compiled by John Brobst, INVESTools.com


1. Toral: "Prepare for a Good 2002" (DYII)

Al Toral says investors now anticipate a recovery, and he
reminds skeptics of how easily the market overcame
disappointing news about Q3 GDP. Corporate inventories now
need replenishing, lower energy costs and interest rates are
encouraging near-term growth, and labor costs have dropped.
"Each one of us breathes a sigh of relief now that the year
2001 is behind us, and all of us will find that the market
in 2002 will be far more productive and rewarding," he says.

To capitalize, Toral recommends buying stock in a list of
handpicked companies, and one of his favorites is Dynacq
International (DYII). The firm provides home care infusion
services and supplies. It also trains patients to administer
medicines and nutrients themselves through IVs and feeding
tubes.

Dynacq has been growing rapidly. Revenues rose from $11
million in 1998 to over $31 million for the first three
quarters of 2001. Profit margins averaged 18% and earnings
grew 100+% over the last three years. Three stock splits
rewarded investors since 1998. "We see Dynacq as an
excellent growth stock that is not too volatile for the
conservative investor," Toral says.

For more on Al Toral's advice see "Cyberlution," January
2002, The Pure Fundamentalist. Alvin Toral uses key
fundamental data to select aggressive growth stocks.

For a free 30-day trial go to:

http://www.investools.com/c/go/PFUN/MTXTH-pfun011002?s=S601

----------------------------------------------------------
2. A Leader in Telecom's Eventual Rebound (ADCT)

ADC Telecommunications (ADCT) enjoyed a nice long run.
Through the 1990s, revenues grew more than tenfold and
peaked at over $3 billion in 2000. Its stock reflected this
as it peaked at $49. But when the telecom bubble burst,
sales for ADC dropped 27% from the prior year to $2.4
billion. The firm posted an annual loss of $1.64 a share,
its first since 1985.

But turnaround expert George Putnam sees better times ahead
for the supplier of products for fiber optics, networking,
equipment and software. "Telecom will be one of the leading
industries for the foreseeable future," he says. "We believe
ADC will not only survive, but perhaps be one of the first
telecom suppliers to rebound." He points to its cash-rich
and debt-free balance sheet, layoffs of 40+%, and other
measures that cut capital expenditures by 60%.

Putnam sees signs that ADC's business is already rebounding.
For instance, the firm just won several new contracts and is
gaining market share. A rebounding economy means more demand
for communication services, and Putnam says that means
growing demand for ADC's equipment. "We recommend buying ADC
up to $7," he says.

For more on George Putnam's advice see "Recommendation,"
January 2002, The Turnaround Letter. George Putnam
concentrates on out-of-favor companies ripe for a turnaround
while trading at a discount to their true value.

For a free 30-day trial go to:

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-----------------------------------------------------------
3. Rip-Roaring Returns from the Post-September 2001 Rebound
(EMC)

Steve Harmon made some great calls around the September 2001
market bottom. For instance, he said "buy" to eight stocks
in the travel security sector. All but one of these is
handsomely in the black, with standouts like Invision
Technologies (INVN) gaining +262% and Identix (IDNX) up
+103%. He also said "buy" to Checkpoint Software (CHKP), and
it has since gained a healthy 68%.

Going forward, one of Harmon's favorite sectors is network
technology. Current favorites include data storage kingpin
EMC (EMC). "Today's commerce relies heavily on intellectual
assets -- DATA -- without which corporations would be
hampered to do business," Harmon says. Little wonder that
EMC's client list is chock full of Fortune 500 companies.

But Harmon's current favorite is Network Appliance (NTAP),
whose shares have rocketed 80% to $26 since November 2001.
The firm recently launched NearStore, a new data storage
solution that enterprise clients can use to restore data
cheaply and quickly. "With EMC, NTAP, Hitachi (HIT) and IBM
(IBM), you could own a basket of the leaders in storage as a
sector play in the near-term," Harmon recommends.

For more on Steve Harmon's advice see "Network Technology,"
December 2001, Broadband Investor. Steve Harmon puts
investors at the forefront of the convergence of technology,
entertainment, communication, commerce and fiber-optics.

For a free 30-day trial go to:

http://www.investools.com/c/go/BRBN/MTXTH-brbn011002?s=S601

----------------------------------------------------------
4. Rex Stores Still a Bargain (RSC)

Stock in Rex Stores (RSC) has climbed over 55% from $18 in
July 2001 to over $28. The retailer buys current models of
consumer electronics and appliances that become available at
a discount because of manufacturer overruns and cancelled
orders. Buyback expert David Fried first recommended Rex
last July and he sees more growth in store even after its
price runup.

"Management has put its money where its mouth is," Fried
says. Over the past year, Rex bought back over 25% of its
outstanding shares, and today's buyback program allows it to
repurchase another 10%. Recent results show why. Q3 EPS rose
72% to $0.50 thanks to a rise in gross margins to 28.5% that
boosted net income 55% to $4.4 million.

Fried notes that Rex's market cap is about $180 million;
this is just $40 million more than a conservative estimate
of the after-tax value of tax credits and depreciated value
of real estate on the books. "Buying $1 for $0.66 is an easy
decision," he says. "We are confident that this holding will
add to our outstanding record of picks in our portfolio."

For more on David Fried's advice see "Featured Article,"
January 2002, The Buyback Letter. David Fried provides
wealth-building opportunities in companies repurchasing
their stock.

For a free 30-day trial go to:

http://www.investools.com/c/go/BACK/MTXTH-back011002


----------------------------------------------------------
5. Enron Debt Woes Bad News for Bank (JPM)

JP Morgan Chase (JPM) continues to be plagued by its
exposure to debt from failed energy trader Enron. The
venerable bank recently said this exposure is $1 billion
more than the $900 million previously announced. Adding
insult to injury, a group of insurers continue to delay
payment of $965 million until the bank says more about its
forward sales contracts to Enron.

Bernie Schaeffer sees more tough times ahead for JP Morgan
Chase & advises an option play to capitalize. He notes that
shares continue to trade below their 10-day and 20-day
moving averages after bouncing off of the $40 level in
November and December. Longer term, the stock trades far
below its 10-month, 20-month and 40-month moving averages,
all of which are heading south.

Meanwhile, always-wrong option punters lowered short
interest by 12% last month. Schaeffer sees the moves of
option traders as a contrary indicator. He recently advised
buying the June 40 put (JPMRH).

For more on Bernie Schaeffer's advice see "Aggressive
Portfolio," January 2002, The Option Advisor. Bernie
Schaeffer provides practical option investing
recommendations that are simple to understand and execute.

For a free 30-day trial go to:

http://www.investools.com/c/go/OPTI/MTXTH-opti011002?s=S600




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Disclaimer

The INVESTools Advisory is published solely for
informational purposes and does not solicit nor offer to buy
or sell any stock, mutual fund or other security. It does
not attempt or claim to be a complete description of the
securities, markets, or developments referred to in the
material. All expressions of opinion are subject to change
without notice. The information is obtained from internal
and external sources which INVESTools considers reliable,
but INVESTools has not independently verified such
information and INVESTools does not guarantee that it is
accurate or complete. INVESTools does not undertake to
advise anyone. INVESTools, its employees, and/or officers
and directors, may from time to time have a position in the
securities mentioned and may sell or buy such securities.


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