More firms added to our stop-loss list (page 2 of 2)

News flow about contract wins that the company expects from Latin America would add to the upside in the company's overall revenue growth. We reiterate our Buy recommendation on UTStarcom Inc, with a 12-months price target of USD 39. UTStarcom is one of our Small and Mid Cap recommendations.

Gold mining stocks Placer Dome Inc (PDG, $16.97, CSFB: Outperform) and Newmont Mining Corp (NEM, $45.24, CSFB: Neutral) both hit our target price, as spot gold rose close to USD 400 an ounce last Monday and trading up to USD 400.550 an ounce on Wednesday, moving above the USD 400 mark for the first time since 1996.

Placer Dome shares yielded a total return of 48.90% YTD. We are increasing out 12-months target price to USD19.50, on strong earnings perspectives in the light of the higher gold price, and our positive outlook for gold.

Newmont Mining shares yielded a total return of 56.44% YTD. We are increasing our 12-months target price to USD 52. We would also like to advise investors considering taking partial profit in the two stocks.

Johnson & Johnson (JNJ, $50.88, CSFB: Not rated)dispute with Boston Scientific Corp over the patents covering JNJ's Cypher stents is entering a new stage. The US District judge in charge of the affair ruled that Boston Scientific could be allowed to market its drug eluting stent Taxus in the US while the patent infringement lawsuits
would continue.

The two companies sued each other on patents that are related to the stent itself, rather than to the fact that the new devices are drug eluting and represent a technological milestone, the judge justified her decision.

Johnson & Johnson said it would appeal against this decision. So far Johnson & Johnson is the only company selling drug eluting stents in the US, a market that is expected to grow to USD 4 billion in 2005 and to USD 7 billion worldwide. Outside the US both companies' stents are in competition and the thread of Boston Scientific, US market entry would certainly hurt JNJ's sales growth for Cypher stents.

Boston Scientific's Taxus stent hasn't however yet received US regulatory approval for sale, and a decision in the patent infringement lawsuits is expected some time next year.

The Cypher stent is currently the main focus of attention in terms of growth at JNJ, which we believe is not warranted.

Thanks to the company's broad diversification it has a wide base for earnings growth. JNJ has a solid growth track record of 13% annual EPS growth over the last 10 years. The defensive characteristics of its business are adding to the stock's attractiveness.

Pharmaceutical stocks closed the week on a weak session, before on Saturday the US House passed the Medicare bill by a narrow 220-215 vote. The bill, which aims to increase Medicare payments to the elderly and disabled is now in the Senate which started debating on Sunday.

Some Democrat Senators said they would try to filibuster the vote. The bill, if passed will allow the government to spend USD395 billion over the next decade to pick up much of the cost of prescription medicines that seniors buy at pharmacies,implicitly expanding sales for drugmakers such as Pfizer Inc (PFE, $33.18, CSFB: Outperform). Given the importance to the bill also for the drug makers, we expect the news flow on the Senate decision to move the share prices in the drug sector.

An approval at this stage looks very likely, as the Republicans have the majority in the Senate. In order to filibuster the vote Democrats would need the support of at lease 40 Senators, and if successful they will try to delay the vote as long as possible, which means into early next year, as after Thanksgiving a decision on the bill appears unlikely, with the Holiday.