Zacks.com Expert Watch Highlights the Following Stocks: GM, GE, JP Morgan, Newmont Mining, Anglogold, Goldcorp, Harmony Gold, and Agnico Eagle.

Business Editors

CHICAGO--(BUSINESS WIRE)--Jan. 21, 2003

Analysts and strategists are setting their targets for the major indices for 2003. Most see improvement during the year, but their spotty records would suggest a healthy dose of skepticism. Find out what indicators the experts are looking at to make their projections. To read the full Experts Watch article with commentary and recommendations on General Motors (NYSE:GM), General Electric (NYSE:GE), JP Morgan (NYSE:JPM), Newmont Mining (NYSE:NEM), Anglogold (NYSE:AU), Goldcorp (NYSE:GG), Harmony Gold (NYSE:HMY) and Agnico Eagle (NYSE:AEM) go to: http://expertwatch.zacks.com

Here are the highlights from the Experts Watch column:

Bugos then feels he must evaluate the potential for strength in the Dow. The editor of the Goldenbar Report is very bearish on stocks like General Motors (NYSE:GM). While the company gained market share in its current line of "best-selling trucks", the company has a significantly under-funded pension. Furthermore, while the sales figures may be bullish for top line growth, the massive size of incentives will be very damaging to margins. Not to mention that the company has halved its earnings outlook to $5/share, vs. the $10 it had predicted last year.

Furthermore, the underfunded pensions could be merely the tip of the iceberg in labor costs. Bugos points to the recent strike of General Electric (NYSE:GE) workers over increases in medical costs as evidence of more problems to come. When most of the growth in a company is related to gains in productivity that can only be sustained so long until wage pressures build. Any significant increase in inflation can accelerate these demands.

Deteriorating outlooks for the Dow stocks have not all made it into the stock prices, though. Bugos highlights JP Morgan (NYSE:JPM), whose consensus estimates on December 9th were $.37. The current estimate for JPM's 4th quarter is a loss of $.02/share. While part of this problem is attributable to the settlement between the major brokerage houses and Elliot Spitzer, JPM seems to be trading on a multiple of 12X the 2003 consensus estimate of $2.41/share. He does not think the company is likely to hit this earnings number, but feels the stock is trading on that estimate.

While the gold stocks have been backing off a bit lately, or at least lagging the bullion, Bugos thinks now could be a good time to get in them. First, many sold their shares as an Elliott Wave analysis seemed to be showing a double top in the price of gold. He thinks many of them are waiting in the wings for a pullback in the shares to reopen positions. Second, the shares had a very strong run this summer while this primary move in the bullion did happen until the 4th quarter. Finally, Bugos notes that not everyone is convinced in the bull market for gold that he sees moving the price up to at least $370/oz in the very short term. As investors become more and more convinced, he feels the premium given to gold shares over the price of gold will only expand.

The Bugos Gold Index currently includes Newmont Mining (NYSE:NEM), Anglogold (NYSE:AU), Goldcorp (NYSE:GG), Harmony Gold (NYSE:HMY) and Agnico Eagle (NYSE:AEM). Agnico Eagle recently commented that it is having problems with transportation in the lower levels of its mines, threatening to push cash costs of production up. The market is pricing in the concerns that the company will not hit its production targets, but Bugos feels it is a buy due to relative valuation, outlook for gold prices and his belief that the company will beat its targets. AEM has a Zacks Rank of 5, which is the equivalent of a Sell recommendation. Goldcorp is the only stock in the Bugos Gold Index with a Zacks Rank equivalent to Moderate Buy (2), with NEM, HMY, and AU all with Holds or Zacks Ranks of 3.

Read the full report with insight from the experts at Zacks.com: http://expertwatch1.zacks.com

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