Wal-Mart (NYSE: WMT) has a new division and it expects the world from it. The company will launch its new small Marketside grocery stores this Fall. Job postings uncovered by the FT indicate that the world's largest retailer expects sales from the chain to eventually hit $10 billion with 1,000 stores in operation.

Wal-Mart insists that the new stores are simply a pilot project, but it is not likely that Wal-Mart would think small. For any new chain to help the company's revenue, sales would have to be very significant.

The new business may face rough going. Big chains like Kroger (NYSE:KR) and Safeway (NYSE:SWY) are likely to fight Wal-Mart every step of the way.

Wal-Mart was the first company into the big box discount retail business. The company was not only remarkably well-run under Sam Walton. It also had the advantage of being the "first mover" In the grocery business; being late to market is a handicap.

Douglas A. McIntyre is an editor at 247wallst.com.

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As the second quarter earnings crunch begins in earnest this week, the bear market has investors jittery and prognosticators spinning out dire warnings. In the wake of mixed results from Alcoa (NYSE: AA) and General Electric (NYSE: GE) kicking things off last week, here's a look at what Wall Street is expecting from many of the companies scheduled to report this coming week.

Analysts surveyed by Thomson Financial are expecting the following companies to report a rise in earnings when compared to the same period of the previous year.

• Nucor Corp. (NYSE: NUE): $1.80 EPS (36.6%) on sales of $6.4 billion (+53.0%)
• Google Inc. (NASDAQ: GOOG): $4.74 EPS (24.9%) on sales of $3.9 billion (+41.6%)
• Nokia Corp. (NYSE: NOK): 56 cents EPS (23.2%) on sales of $19.9 billion (+17.8%)
• CSX Corp. (NYSE: CSX): 90 cents EPS (21.1%) on sales of $2.9 billion (+12.8%)
• Altera Corp. (NASDAQ: ALTR): 27 cents EPS (18.5%) on sales of $346.7 million (+8.4%)
• IBM (NYSE: IBM): $1.82 EPS (+17.6%) on sales of $25.9 billion (+9.0%)
• eBay Inc. (NASDAQ: EBAY): 41 cents EPS (17.1%) on sales of $2.2 billion (+18.0%)
• W.W. Grainger Inc. (NYSE: GWW): $1.46 EPS (17.1%) on sales of $1.7 billion (+8.0%)
• Microsoft Corp. (NASDAQ: MSFT): 47 cents EPS (17.0%) on sales of $15.7 billion (+17.0%)
• Honeywell International Inc. (NYSE: HON): 94 cents EPS (17.0%) on sales of $9.2 billion (+7.9%)

• Eaton Corp. (NYSE: ETN): $1.95 EPS (12.8%) on sales of $4.1 billion (+27.5%)
• Intel Corp. (NASDAQ: INTC): 25 cents EPS (12.0%) on sales of $9.3 billion (+7.4%)
• Abbott Laboratories (NYSE: ABT): 79 cents EPS (12.7%) on sales of $7.2 billion (+13.2%)
• Baxter International Inc. (NYSE: BAX): 82 cents EPS (12.2%) on sales of $3.1 billion (+7.7%)
• Coca-Cola Co. (NYSE: KO): 96 cents EPS (11.5%) on sales of $8.9 billion (+15.6%)
• Danaher Corp. (NYSE: DHR): $1.06 EPS (11.3%) on sales of $3.2 billion (+18.4%)
• United Technologies Corp. (NYSE: UTX): $1.30 EPS (10.8%) on sales of $15.3 billion (+9.9%)
• Schlumberger Ltd. (NYSE: SLB): $1.12 cents EPS (8.9%) on sales of $6.5 billion (+14.8%)
• Illinois Tool Works Inc. (NYSE: ITW): 97 cents EPS (7.2%) on sales of $4.6 billion (+9.9%)
• Yum! Brands Inc. (NYSE: YUM): 42 cents EPS (7.1%) on sales of $2.6 billion (+7.6%)
• Johnson & Johnson (NYSE: JNJ): $1.12 EPS (6.3%) on sales of $16.0 billion (+5.7%)
• Safeway Inc. (NYSE: SWY): 52 cents EPS (5.8%) on sales of $10.2 billion (+3.9%)
• Genuine Parts Co. (NYSE: GPC): 79 cents EPS (3.8%) on sales of $2.9 billion (+2.8%)

Analysts are looking for a number of the big financials reporting next week to post declines in earnings, but I've focused on those companies in a separate post (see Financials expected to post earnings declines, losses this week). The companies below are also expected to post declines in profit.

• Novellus Systems Inc. (NASDAQ: NVLS): 4 cents EPS (-91.1%) on sales of $251.5 million (-39.6%)
• Delta Air Lines Inc. (NYSE: DAL): 11 cents (-84.3%) on sales of $5.4 billion (+8.3%)
• Mattel Inc. (NYSE: MAT): 3 cents EPS (-50.0%) on sales of $1.0 billion (+3.9%)
• Harley-Davidson Inc. (NYSE: HOG): 76 cents EPS (-33.3%) on sales of $1.4 billion (-12.4%)
• Gannett Inc. (NYSE: GCI): $1.02 EPS (-17.7%) on sales of $1.7 billion (-10.0%)
• Sherwin-Williams Co. (NYSE: SHW): $1.39 EPS (-8.6%) on sales of $2.2 billion (-0.3%)

Continental Airlines Inc. (NYSE: CAL) is expected to swing to a loss of 52 cents (from $2.10 EPS last year) on $4.1 billion (+9.3%). And Advanced Micro Devices Inc. (NASDAQ: AMD) is expected to narrow its loss to 52 cents per share (from 95 cents per share last year) on sales of $1.5 billion (+5.2%).

With expectations listed out this way Wall Street seems pretty optimistic about earnings (other than for financial companies; see Financials expected to post earnings declines, losses this week). But we'll see this week whether the companies above can live up to these expectations. Do you think they will?

Other economic data coming out next week include:

• Producer price index (June 2008), Tuesday, 8:30 a.m. ET
• Business inventories (May 2008), Tuesday, 10:00 a.m. ET
• Consumer price index (June 2008), Wednesday, 8:30 a.m. ET
• NAHB housing market index (July 2008), Wednesday, 1:00 p.m. ET
• Housing starts (June 2008), Thursday, 8:30 a.m. ET

See also Market highlights for next week: Google, Microsoft reporting earnings

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MOST NOTEWORTHY:

• Stephens downgraded shares of Texas Industries (NYSE: TXI) to Equal Weight from Overweight as it believes higher energy costs will affect the company's ability to achieve its guidance. The firm lowered its target to $68 from $83.
  
• Jefferies assumed coverage and downgraded shares of TransGlobe Energy (NYSE:TGA) to Hold from Buy as it sees limited upside until the company completes its seismic activity and can better quantify its exploratory reserve potential. The firm lowered its target to $5.25 from $6.50.
  
• Citigroup downgraded Level 3 (NASDAQ: LVLT) to Sell from Hold as it believes the pullback in telecom valuations increases downside risk for the stock. Citigroup lowered their target price to $2.50 from $3.

• Safeway (NYSE: SWY), Sysco (NYSE:SYY) and Whole Foods (NASDAQ: WFMI) were cut to Neutral from Buy at UBS.
  
• Piper lowered Third Wave (NASDAQ:TWTI) to Neutral from Buy.
  
• China Petroleum (NYSE: SNP) was lowered at JP Morgan to Underweight from Overweight.

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Kroger (NYSE: KR) is one of the nation's largest retail grocery chains. It operates nearly 2,500 supermarkets and multi-department stores in 31 states, under such local banners as Kroger, Ralphs, Fred Meyer, Fry's, Dillons, QFC and City Market. The firm also operates about 778 convenience stores, 392 fine jewelry stores, 723 supermarket fuel centers and 41 food processing plants. Despite diversification moves, Kroger food stores still account for about 85 percent of sales. Wal-Mart (NYSE: WMT) and Safeway (NYSE: SWY) are major competitors.

The firm pleased investors last week, when it reported fiscal Q1 EPS of 58 cents and revenues of $23.11 billion. Analysts had been expecting 55 cents and $22.32 billion. The EPS figure was a company record. Management also offered in-line guidance for FY09 earnings and said that about $643.6 million remained under the $1 billion stock repurchase program announced in January.

KR shares popped on the news and then began defining a bullish "flag" consolidation pattern. Stocks often leave flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the issue with three "strong buys", five "buys", two "holds" and one "underperform". The KR P/E ratio (15.86), Price to Sales ratio (0.26), Price to Book ratio (3.76), Price to Cash Flow ratio (7.15), EPS Growth rate (23.28%) and Return on Equity (24.04%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 83% of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Over the past 52 weeks, it has traded between $23.39 and $30.00. A stop-loss of $24.90 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.

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Here are a few highlights from this past week's earnings coverage from BloggingStocks:

• Amkor Technology Inc. (NASDAQ: AMKR) easily beat estimates and raised its guidance.
• Crocs Inc. (NASDAQ: CROX) posted solid fourth-quarter results on strong overseas sales.
• DealerTrack Holdings (NASDAQ: TRAK) fourth-quarter revenue rose, but the credit crunch hurt results.
• Garmin Ltd. (NASDAQ: GRMN) fourth-quarter earnings soared on strong holiday sales.
• Gilat Satellite Networks Ltd. (NASDAQ: GILT) posted strong quarterly and full-year results.
• HJ Heinz Co. (NYSE: HNZ) raised its guidance productivity gains and favorable exchange rates.
• JAKKS Pacific Inc. (NASDAQ: JAKK) posted solid results, lifted by Hannah Montana and Disney toys.
• Marvel Entertaiment Inc. (NYSE: MVL) earnings doubled despite investment in films not yet released.
• Newmont Mining Corp. (NYSE: NEM) swung to a fourth-quarter loss despite rising gold prices.
• Safeway Stores Inc. (NYSE: SWY) met fourth-quarter earnings estimates, ending its best year since 2001.
• Wal-Mart Stores Inc. (NYSE: WMT) posted its first $100 billion quarter but lowered its forecast.

Also, Jim Cramer sees Hewlett-Packard as a market bellwether, and Ted Allrich looks at some other bellwether stocks. Sheldon Liber gets a sense of deja vu from Exxon Mobil's (NYSE: XOM) big profits and its tussle with Chavez.

Upcoming results to watch for include Nordstom Inc. (NYSE: JWN), Macy's Inc. (NYSE: M), Washington Post Co. (NYSE: WPO), Dell Inc. (NASDAQ: DELL), Sprint-Nextel Corp. (NYSE: S), and Sears Holdings Corp. (NASDAQ: SHLD).

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Shares in supermarket chain Safeway (NYSE:SWY) dropped 7% yesterday setting up investors with an interesting investment opportunity. The stock is off more than 25% from its' 52-week high. Investors were spooked about a slowdown in same store sales. I think investors need to take a second look at the company.

With an economic slowdown, many consumers will turn to home made food as opposed to eating out. This will be a big benefit to the supermarket. Another catalyst for the stock is that, unlike other food retailers like restaurants, they are able to pass on rising costs to the consumer. This will help keep their bottom line from dropping.

At these levels for investors looking for an inflation protected portfolio, you may want to take a look at Safeway.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no positions in any stock mentioned as of 2/22/08.

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Among companies reporting quarterly earnings on Thursday were Safeway Stores Inc. (NYSE: SWY), the largest food retailer in North America, and Newmont Mining Corp. (NYSE: NEM), one of the world's largest gold producers.

Despite ongoing efforts to upgrade the image of its stores, Safeway, which reported that fourth-quarter earnings in-line with the consensus estimates of analysts surveyed by Thomson Financial, also reported that same-store sales slowed.

The quarterly earnings came to $301.1 million, or 68 cents per share, for the period that ended December 29, down 2% from $307.9 million, or 69 cents per share, in the same quarter of 2006, when tax benefits lifted results. Excluding that gain, earnings per share would have climbed by more than 11%. Fourth-quarter revenue rose 7% to $13.36 billion, which beat the analysts' average estimates.

Despite signs of a slowdown, the fourth quarter capped Safeway's most profitable year since 2001. The company earned $888.4 million, or $1.99 per share, on sales of $42.3 billion, compared to earnings of $870.6 million, or $1.94 per share, on revenue of $40.2 billion in 2006. For 2008, Safeway forecast earnings of $2.25 to $2.35 per share, in-line with analysts' expectations.

Safeway shares fell more than $3 in morning trading, reaching a new 52-week low of $28.80.

Despite rising gold prices, Newmont reported that it swung to a loss in the fourth quarter due to a $1.1 billion non-cash charge for reserve replacement and new accounting rule requirements, as well as lower gold sales.

For the quarter ending December 31, the company posted a net loss of $289 million, or 63 cents a share, compared with net income of $223 million, or 49 cents a share, in the year-ago quarter. Revenue slipped to $1.41 billion from $1.42 billion. Analysts polled by Thomson Financial had expected a profit of 37 cents per share on revenue of $1.47 billion.

For the year, Newmont reported a net loss of $1.9 billion, or $4.17 a share, compared with $791 million, or $1.75 a share, in 2006. But revenue rose to $5.53 billion from $4.9 billion.

Newmont shares fell more than a dollar in morning trading before beginning to recover. Shares are still off their 52-week high of $57.55 back in January.

Visit AOL Money & Finance for more earnings coverage.

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• At 8:30 a.m. EST, weekly jobless claims are due.
• January leading indicators will be reported at 10:00 a.m., along with manufacturing in the Philadelphia region for February.

RBC upgraded Baidu (NADSAQ: BIDU) to "outperform" from "sector perform" according to Briefing.com. The news service also reports that Morgan Stanley downgraded Level 3 (NASDAQ: LVLT) to "underweight" from "equal weight."

Safeway (NYSE: SWY) raised to "neutral" from "sell" at UBS, according to 24/7 Wall St. The news also reported that UBS (NYSE: UBS) was downgraded to "hold" from "buy" at Deutsche Bank.

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Chattem (NASDAQ: CHTT) provides over-the-counter drugs, personal care products and dietary supplements. Offerings include such pain treatments as dental analgesic Benzodent, topical analgesic Aspercreme, muscle pain reliever Flexall, menstrual symptom reliever Pamprin, analgesic Icy Hot and itch medicine Cortizone-10. The company also makes Melatonex and Unisom sleep aids, Gold Bond medicated powder, Selsun Blue dandruff shampoo, ACT mouthwash and BullFrog sunblock. Chattem sells its products in eighty countries, through such merchandisers as CVS Caremark (NYSE: CVS), Safeway (NYSE: SWY) and Walgreen (NYSE: WAG).

The company surprised investors last week, when it reported Q4 EPS of 76 cents and revenues of $100.6 million. Analysts had been expecting 65 cents and $100.5 million. Management also guided FY08 EPS to $4.00-$4.20 ($3.83 consensus).

The stock popped on the news and has since moved into a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the stock with three "strong buys", three "buys", three "holds" and one "underperform". The CHTT Price to Free Cash Flow ratio (18.62), Sales Growth rate (54.53%), EPS Growth rate (137.50%), Operating Margin (28.86%), Net Profit Margin (14.10%), Return on Assets (9.98%) and Return on Equity (35.39%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 95% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $49.90 and $80.99. A stop-loss of $66.50 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.

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MOST NOTEWORTHY:

• Wachovia upgraded shares of Sprint Nextel Corporation (NYSE: S) to Outperform from Market Perform as they believe the company is within six months of reaching a sustainable turnaround in subscriber growth and that investor expectations can not get much lower.
• CIBC upgraded shares of Safeway Stores Inc (NYSE: SWY) to Sector Outperformer from Sector Performer after the company's strong quarter in a challenging environment.
• Jefferies raised its rating on PharmaNet Development Group Inc (NASDAQ: PDGI) to Buy from Hold as they believe the company should achieve leverage in margins after executing its turnaround.
• Millennium Pharmaceuticals Inc (NASDAQ: MLNM) was upgraded to Outperform from Neutral at Baird. The firm said expectations for Millennium and Velcade are low and would be buyers for the quarter given the ASH meeting and downstream pipeline visibility.
  
• Telefonica SA (NYSE: TEF) was upgraded to Buy from Hold at Citigroup following the company's earnings growth guidance.

• Centene Corporation (NYSE: CNC) was upgraded to Overweight from Equal Weight at Lehman Brothers.
• UBS upgraded NII Holdings Inc (NASDAQ: NIHD) to Buy from Neutral.
• Goldman Sachs added Knight Capital Group Inc (NASDAQ: NITE) to its Conviction Buy List.
• RBC Capital upgraded Annaly Capital Management (NYSE: NLY) to Outperform from Market Perform.

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When it comes to O.T.C. drug products, folks are often surprised to learn that a single Tennessee outfit is responsible for nearly thirty of the best known names. It was founded 128 years ago, as the Chattanooga Medicine Company.

Chattem (NASDAQ: CHTT) provides over-the-counter drugs, personal care products and dietary supplements. Offerings include such pain treatments as dental analgesic Benzodent, topical analgesic Aspercreme, muscle pain reliever Flexall, menstrual symptom reliever Pamprin and analgesic Icy Hot. The company also makes sleep aid Melatonex, medicated powder Gold Bond and Mudd facial masks. Chattem sells its products in eighty countries, through such merchandisers as CVS Caremark (NYSE: CVS), Safeway (NYSE: SWY) and Walgreen (NYSE: WAG).

The company surprised investors last week, when it reported Q3 EPS of 83 cents and revenues of $109 million. Analysts had been expecting 74 cents and $106 million. Management also guided FY07 EPS to $2.96-3.06 ($2.95 consensus) and FY08 EPS to $3.69-3.89 ($3.56 consensus).

Brokers recommend the stock with two "strong buys", one "buy", six "holds" and a "sell". Analysts see a 24% growth rate, through the next year. The CHTT Sales Growth rate (51.39%), EPS Growth rate (102.44%), Operating Margin (26.81%) and Revenue per Employee ($923.50k) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 95% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $34.21 and $74.00. A stop-loss of $63.00 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.

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When you are shopping for food, you like to know that the store you are in has a long-standing reputation for reliability. There is a chain based in Cincinnati that has such a reputation. It has been filling grocery bags for 124 years.

Kroger (NYSE: KR) is one of the nation's largest retail grocery chains. It operates nearly 2,500 supermarkets and multi-department stores in 31 states, under such local banners as Kroger, Ralphs, Fred Meyer, Fry's, Dillons, QFC and City Market. The firm also operates about 780 convenience stores, 406 fine jewelry stores, 664 supermarket fuel centers and 42 food processing plants. Despite diversification moves, Kroger food stores still account for about 85% of sales. Wal-Mart (NYSE: WMT) and Safeway (NYSE: SWY) are major competitors.

The firm pleased investors earlier in the week, when it reported fiscal Q2 EPS of 38 cents and revenues of $16.14 billion. Analysts had been expecting 34 cents and $16 billion. Management also guided FY08 EPS to $1.64-1.67, versus Street consensus of $1.66.

Brokers recommend the shares with three "strong buys", three "buys" and eight "holds". Recent price targets are in the low- to mid-$30s. The KR P/E ratio (17.25), Price to Sales ratio (0.29), Price to Book ratio (4.04), Price to Cash Flow ratio (7.96), EPS Growth rate (31.03%) and Return on Equity (25.07%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 83% of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Through the past twelve months, it has traded between $21.12 and $31.94. A stop-loss of $24.90 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.

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MOST NOTEWORTHY:

• Friedman Billings downgraded dELiA's Inc (NASDAQ: DLIA) to Market Perform from Outperform citing the difficult near-term environment.

• Deutsche Bank would use Hearst-Argyle TV's (NYSE: HTV) tender offer for the remaining shares of HTV at $23.50 as an opportunity to sell shares and cut the stock to Hold from Buy.

• Merrill cut Safeway (NYSE: SWY) shares to Sell from Neutral citing the slowing California economy and the potential threat from Wal-Mart (NYSE: WMT) entering the California market with its new Tesco (OTC: TSCDY) format...

• Vimicro (NASDAQ: VIMC) was cut to Underweight from Equal Weight at Morgan Stanley.

• BB&T downgraded Green Bankshares (NASDAQ: GRNB) to Hold from Buy.

• Citigroup downgraded Samsung to Hold and Hynix Semiconductor to Sell.

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In any antitrust analysis, it's critical to define the "relevant market." Basically, the FTC argued that it was very narrow and would mean fewer choices for consumers. What's more, there were some damaging emails from Whole Foods, which said things like "avoid nasty price wars."

Well, Judge Friedman didn't let this color his legal analysis. Hey, don't all successful companies have a fierce competitive streak?

Simply put, traditional grocers -- such as Safeway Inc. (NYSE: SWY) and Kroger Co. (NYSE: KR) -- are doubling down on organic foods. The judge even indicated that about 60% of such foods come from traditional grocers. Thus, if Whole Foods wants to crank up prices, it will be tough to keep its customers (except for those who are highly loyal).

All in all, the judge's decision makes a lot of sense to me. And is another indication of how dynamic markets can be -- and that, even though the law can be slow, it seems like it is in keeping with the times in this case.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

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MOST NOTEWORTHY:

• Sunpower Corp (NASDAQ: SPWR) was downgraded to Buy from Strong Buy at Needham and to Neutral from Buy at Merrill Lynch, both based on valuation.

• U.S. Steel Group (NYSE: X) was downgraded to Neutral from Outperform at Credit Suisse on valuation.

• Sysco Corp (NYSE: SYY), Safeway Inc (NYSE: SWY), Performance Food Group (NASDAQ: PFGC) and Kroger (NYSE: KR) were downgraded to Hold from Buy at BB&T Capital. The firm expects higher food cost inflation to impact near-term real sales growth and margins industry-wide...

• Merrill Lynch downgraded shares of Huntington Bancshares (NASDAQ: HBAN) to Sell from Neutral following the company's Q2 report.

• Hershey (NYSE: HSY) was downgraded to Peer Perform from Outperform at Bear Stearns.

• Matrix downgraded shares of Park Electrochemical (NYSE: PKE) to Buy from Strong Buy and shares of Canadian National (NYSE: CNI) to Hold from Buy.

• Lehman Brothers downgraded shares of Williams Scotsman (NASDAQ: WLSC) to Equal Weight from Overweight.

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People are often a little vague about who makes their favorite O.T.C. drug products. There is an outfit in Tennessee that is responsible for nearly thirty of the best known brand names. It was founded as the Chattanooga Medicine Company, in 1879.

Chattem Inc. (NASDAQ: CHTT) provides over-the-counter drugs, personal care products and dietary supplements. Offerings include such pain treatments as dental analgesic Benzodent, topical analgesic Aspercreme, muscle pain reliever Flexall, menstrual symptom reliever Pamprin and analgesic Icy Hot. The company also makes sleep aid Melatonex, medicated powder Gold Bond and Mudd facial masks. Chattem sells its products in eighty countries, through such merchandisers as CVS Caremark (NYSE: CVS), Kroger (NYSE: KR), Safeway (NYSE: SWY), Target (NYSE: TGT) and Walgreen (NYSE: WAG). Johnson & Johnson (NYSE: JNJ) and Procter & Gamble (NYSE: PG) are major competitors.

The company surprised investors earlier in the week, when it reported Q2 EPS of 85 cents and revenues of $113.0 million. Analysts had been expecting 77 cents and $111.6 million. Management also guided FY07 EPS to $2.81-$3.00, versus Street consensus of $2.91. The news kept CHTT shares cycling through a positive sixteen week trading channel. The price is currently consolidating at the base of that channel, where oversold CCI and Stochastic technical parameters suggest the potential for a rise back toward the top. Correspondence of the stock's 50-day moving average to the base of the channel backs the rebound notion.

Brokers recommend the shares with three "strong buys," one "buy," six "holds" and one "sell." Analysts expect a 22% growth rate, through the next year. The CHTT Sales Growth rate (42.32%), EPS Growth rate (49.12%), Operating Margin (27.72%), Net Profit Margin (13.88%) and Revenue per Employee ($835.5k) compare favorably with industry, sector and S&P 500 averages. Institutions own about 95% of the outstanding shares. Over the past 52 weeks, the stock has traded between $31.77 and $67.55. A stop-loss of $55.00 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.

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