In my never ending attempt to put traders and investors in the Premier Investor Network on the right side of a trade, I've turned to many a "boring" listed stock on the New York Stock Exchange. Last fall it was International Paper (NYSE:IP), this spring it was stocks like Caterpillar (NYSE:CAT), Forest Labs (NYSE:FRX) and Du Pont (NYSE:DD). Lately it's been shares of Deere, Co. (NYSE:DE) and Nike (NYSE:NKE). Ok, Du Pont (DD) has not set the world on fire, but some subscribers are doing well in the other five. Today I'm going to simply use the very same technique of relative strength and sector analysis to make a case for shares of Eastman Kodak (NYSE:EK) as a stock that will gain favor and outperform the broader market indices in the next six months.
Eastman Kodak vs. S&P 500 Relative Strength Chart
Traders looking to escape the more "uncertain" and volatile technology stocks have done "surprisingly" well in some old boring listed stocks. Heck, some subscribers are finding their longer-term options account rivaling their technology trading account from years past. We know too well that the MARKET has changing tastes for stocks over time. For a while it may be "growth" style of investing that is popular. Then value comes back into favor and the more "predictable" earnings visibility. One stock that has been gaining favor with the MARKET is recent months is shares of Eastman Kodak (NYSE:EK). It's a stock I feel has considerable upside in coming months. The kicker may be a weakening US$ against a Japanese Yen. For years, EK has complained of anti-competitive pricing pressures from Japan's Fuji Photo Film and China's Lucky. Eastman Kodak (EK) controls more than half the world market, while Fuji and Lucky split approximately 20-25% of the remainder.
Today's turn back into the column of X's on the relative strength chart for Eastman Kodak (EK) may be worth a thousand words. To a longer-term options trader/investor, that may turn into dollars months from now. Currently, the Jan02 $45 calls (EKDI) are offered $4.60 and the Jan03 $45 calls are offered $6.40 (VEKAI).