Cintas Corporation designs, manufactures, and implements corporate identity uniform programs which it rents or sells to customers throughout the U.S. and Canada. For the 3 months ended 8/31/00, total revenues increased 14%to $522M. Net income increased 18% to $50.8M. Results benefitted from the growth of the customer base and higher sales in the catalog business. Earnings also reflect lower interest expense related to the repayment of long-term debt.

December 3, 2000

CTAS has recently found growth through an expansion strategy entailing a tailored catalog to its client base. Ending the week lower, CTAS pulled back on Friday to close just below previous support at $50. However, the stock is still in a relatively good position to recovery should we see a solid bounce from current levels on good volume. If a reversal does unfold, expect to see opposition arise at the recent high of $52.91 and higher up at $55. One interesting characteristic of the stock is that it tends to have an inverse relationship to the broader market. When the market declines, CTAS tends to advance. With that said, look for weakness in the broader markets, particularly the tech-heavy NASDAQ Composite Index (COMPX), to give shares a boost to higher levels. Additionally, remember to confirm entries when good volume of 1 million shares or better can follow an advance above resistance levels. On the flip side, look for recent highs at $49, backed up by the 20-dma of $49 to provide support. A fall below this level will likely trigger our stop of $48.50, so keep a close watch on any moves below $49.

December 5, 2000

A Merrill Lynch downgrade on CTAS from "near-term accumulate" to "near-term neutral" sent shares lower during Monday's session. A sharp gap down at the open caused our stop to be hit at $48.50, but the stock did manage to give us a few opportunities to capture profits ahead of the selling. Advancing through stiff resistance at $50, the stock did provide us with gains on two separate runs near $52.75.