by Adam Samuels

There are two old sayings that come to mind as September comes to a close in the stock market. The first is, “Every dog has its day,” and the second is “Everything old is new again.” The aforementioned “dog” is Motorola (MOT), which was first recommended in February by our stock market expert for this month, Meredith Jones, branch manager for Raymond James Financial Services. At that time, the stock was languishing near its 52 week low at $8.10. The stock made a big move with the technology sector in the last few months and now trades at $12.31. While we at Portfolio sold the stock a couple of months ago in order to take a profit, Jones is now recommending that his clients do the same. As to the second statement about everything old being new again, we have the words “total return” and “global stocks” reentering our vocabulary. The first boils down to a recommendation of a stock that may not be a fast mover but has a dividend. The second group, global stocks, has been out of fashion for long enough, and Jones is adding two global stocks for total return to Portfolio this month.

Jones thinks we’re nearing the top of a trading range in the Dow and admits he “would be surprised if we had any big move through 10,000,” and thinks we could have a more severe reversal if we had weakness below the 8,700 level. “If you look at the recent rally we’ve had in the market, it resembles the rebound in the Dow from its lowest levels after the crash of 1929.”With that in mind, Jones is taking his tech stocks “off the table.” He feels that “people are jittery and as long as that exists, I think investors now have the opportunity to look abroad for a better total return.”

Besides the global stocks, Jones feels another opportunity in the stock market for some of the money exiting the technology sector is in genomics. “In April of 2003, the map of the human genome was completed with major contributions from the Washington University Human Genome Center,” he says. The work was completed faster than expected, thereby paving the way for targeted medicine. “I think more aggressive investors can let go of some technology and move to genome stocks.” A couple of the names mentioned were the two divisions of a company called Applera, Applied Bio Systems (ABI) and Celera Genomics (CRA).

Finally, we asked Jones to remove two stocks from Portfolio and add two of his own. Since he already informed us he was reducing exposure to technology stocks, it wasn’t too hard to guess that IBM and Microsoft (MSFT) would have to go. In their place we have two global stocks featuring total return. The first, Royal Dutch (RD) has a yield of 4.3 percent, but has languished for seven years. “As one of the world’s largest oil companies, I think it would benefit from a global recovery,” Jones says. The second addition is Unilever (UL), which is one of the world’s largest producers of consumer goods, including Lipton, Ben & Jerry’s, Dove and Slim-Fast. “The company has been on a four to five year corporate turnaround called the “Path to Growth” strategy, which should finally take hold,” says Jones. Besides, with a dividend of 4 percent, investors can afford to wait.

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