Universal Corporation is an independent leaf tobacco merchant and has additional operations in agri-products and the distribution of lumber and building products. For the 6 months ended 12/00, revenues fell 10% to$1.65B. Net income fell 5% to $52.8M. Revenues reflect lower tobacco revenues due to delays in shipments from Zimbabwe and smaller U.S. crops. Net income reflects increased interest expense and reduced equity in affiliates.

March 11, 2001

There is strong evidence that investors and money managers alike still hold large cash positions. After attempting to rally "value" technology stocks, many were burned later in the week as the NASDAQ made a new low. This set of circumstances helps to explain why UVV continues to rally. This tobacco merchant and distributor of lumber and building products is trading at a very low P/E of 10.22. Investors are extremely risk adverse these days and UVV offers a relative value. UVV actually managed to establish a new 52-week high of $39.00 during a day that saw the Dow Jones Industrials (INDU) drop 213.63 points. This fact may encourage the momentum-trading crowd to jump on board. UVV may really start to roll if it can climb above the $39.50 resistance level established way back in June of 1998. A good time to initiate a position might be when UVV looks like it is going to close above this resistance and has crossed 100,000 shares in daily volume. After a lengthy ascent, the MACD has cooled off but remains positive. OBV is currently making new highs and could be forecasting continued new highs for the stock. The RSI is brushing the top end of its range. Therefore, we would be cautious about picking up the stock if it starts slipping in the early going on Monday, especially if UVV slips below the support offered by the 10-DMA of $38.13.

Picked on March 11th @ $38.99
Change since picked +0.00
Stop Loss @ $37.00

March 18, 2001

UVV - Universal Corporation $36.06 (-2.93) UVV simply could not avoid the early selling pressure that gripped the market on Friday. We thought that a bounce off the $37.00 support level would afford us a good buying opportunity. Nevertheless, UVV slipped below our $37.00 stop. If we see renewed market interest in low P/E stocks this week, we may be tempted to try and pick up UVV again if it can hold up at current levels.

Picked on March 11th @ $38.99
Profit/Loss -1.99 (5%) (Stopped on Friday @ $37.00)
Best Profit +0.21 (1%)