E-motions: Vol. No. 1, Issue No. 33 Brought to you by California News Tech (OTC BB: CNTE)

By: Tai Nicolopoulos E-Motions Writer 08/17/2006

Despite Bright Spots, the Housing Market has Turned Some Stocks into Depressed Properties

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1. Emotions in Focus: Investors Give Extra Weight to Negative Housing News, May Miss Opportunities

    Recently, the media has made some conflicting reports about the condition of the US housing market. Home prices are plummeting in areas that used to be some of the country’s hottest, but some experts contradict that home sales in the moderately-priced majority of the country remain strong because of job creation and a steady economy. The Fed seems to be holding off on further interest rate hikes for now, but many investors playing the stock market last week seemed to think this was merely a temporary pause. Overall, it remains unclear what will happen to housing prices nationwide.

    The outcome of this uncertainty follows a familiar pattern when it comes to crowd reaction to news. Investors read the news, hearing both negative and positive facts and opinions about the housing market, but because they fear a negative outcome, they tend to focus on the bad news. Even though the big picture may be largely positive for real estate in middle America, leaving plenty of room for investment opportunities, investors focused on flagging prices of residential properties in some of the country’s most expensive areas.

2. The Big Movers and Why

    Are you missing out on potential profits from Heads UpTM recommendations? Recently, MediaSentimentTM subscribers using Heads UpTM for Thumbs Up / Thumbs Down recommendations for publicly traded companies were able to take advantage of these Big Movers, moving 10% or more in their recommended directions, after they released earnings.

Big Movers in the Spot light:

    All figures reflect all Media Sentiment® Heads Up recommendations between Monday, August 7, 2006 and Friday, August 11, 2006, rating companies on the day of their quarterly earnings releases correlated with their stock highs and lows for the subsequent day.

    Last week two stock tied to the real estate market suffered from investors’ anxieties. Comstock Homebuilding Companies Inc. (Nasdaq: CHCI), which operates as a residential real estate developer, went down a crushing 27.95% on August 7, 2006 after a Thumbs Down recommendation from Heads Up™. Similarly, Fieldstone Investment Corp. (Nasdaq: FICC), a mortgage real estate investment trust (REIT), which engages in the origination, securitization, sale, and servicing of nonconforming and conforming single-family residential mortgage loans, went down 17.40% on August 10, 2006 after a Thumbs Down recommendation from Heads Up™. Clearly, investors believed the negative news, not the positive, surrounding the real estate market. However, they may have been too focused on a narrow segment of the sector. Companies involved in commercial real estate or construction were not necessarily a bad move last week. For instance, H&E Equipment Services, Inc. (Nasdaq: HEES), which provides heavy construction and industrial equipment in the United States, went up 11.17% on August 10, 2006 after a Thumbs Up recommendation from Heads Up™. For investors with the right focus, real estate could have been a great source of potential profit, despite the negative and conflicting news reports.

Other Big Movers:

Viasys Healthcare Inc. (NYSE: VAS), which engages in the development, manufacture, marketing, and service of medical devices, instruments, and medical and surgical products worldwide, went up 10.40% on August 8, 2006 after a Heads Up™ Thumbs Up.

Huron Consulting Group Inc. (Nasdaq: HURN), which provides financial and operational consulting services in the United States, went up 10.75% on August 8, 2006 after a Heads Up™ Thumbs Up.

Concurrent Computer Corp. (Nasdaq: CCUR), which provides computer and software systems for the video-on-demand and real-time operating systems/productivity tools market, went down 20.11% on August 11, 2006 after a Heads Up™ Thumbs Down.

Verso Technologies Inc. (Nasdaq: VRSO), which provides IP networking solutions for communications carriers, service providers, enterprises, and resellers worldwide went down 11.70% on August 11, 2006 after a Heads Up™ Thumbs Down.

OpenTV Corp. (Nasdaq: OPTV), which provides software, applications, and professional services for interactive and enhanced television worldwide, went down 11.07% on August 10, 2006 after a Heads Up™ Thumbs Down.

Cepheid (Nasdaq: CPHD), which engages in the development, manufacture, and marketing of systems that perform genetic analysis for clinical molecular diagnostics, industrial, and biothreat markets, went down 25.03% on August 8, 2006 after a Heads Up™ Thumbs Down.

Per-Se Technologies Inc. (Nasdaq: PSTI), which offers connective healthcare solutions to physicians, hospitals, and pharmacies in the United States, went down 15.51% on August 8, 2006 after a Heads Up™ Thumbs Down.

Treehouse Foods Inc. (NYSE: THS), which operates as a food manufacturer primarily servicing the retail grocery, foodservice, and industrial markets in the United States, went down 13.22% on August 10, 2006 after a Heads Up™ Thumbs Down.

Spatialight Inc. (Nasdaq: HDTV), which engages in the manufacture and sale of high-resolution liquid crystal on silicon microdisplays, went down 11.54% on August 10, 2006 after a Heads Up™ Thumbs Down.

Worldspace Corporation (Nasdaq: WRSP), which engages in the design, development, construction, deployment, and financing of a satellite-based radio and data broadcasting service primarily in India and China, went down 35.56% on August 10, 2006 after a Heads Up™ Thumbs Down.

Acusphere Inc. (Nasdaq: ACUS), which develops new drugs and formulations of existing drugs using its proprietary porous microparticle technology in the United States, went down 22.79% on August 10, 2006 after a Heads Up™ Thumbs Down.

Oscient Pharmaceuticals Corp. (Nasdaq: OSCI), which engages in the clinical development and commercialization of therapeutics to serve medical needs in the United States, went down 17.21% on August 8, 2006 after a Heads Up™ Thumbs Down.

Inspire Pharmaceuticals Inc. (Nasdaq: ISPH), which engages in the discovery, development, and commercialization of prescription pharmaceutical products, went down 10.79% on August 8, 2006 after a Heads Up™ Thumbs Down.

AP Pharma Inc. (Nasdaq: APPA), which develops pharmaceutical products utilizing its proprietary polymer-based drug delivery systems, went down 15.69% on August 8, 2006 after a Heads Up™ Thumbs Down.

Quanta Capital Holdings Ltd. (Nasdaq: QNTA), which provides insurance and reinsurance products, as well as risk assessment and risk consulting services, went down 11.63% on August 8, 2006 after a Heads Up™ Thumbs Down.

HomeBanc Corp. (NYSE: HMB), which engages in the mortgage banking business primarily in the southeast United States, went down 12.20% on August 7, 2006 after a Heads Up™ Thumbs Down.

3. How to Use the News

    While many stocks had good reason to go down last week, with the looming threat of terrorism, and news of a softening real estate market, there was still room for money making opportunities. As is often the case when sector-wide bad news hits, companies that stand out from the negative trend can become under priced opportunities. It is still important to remember, however, that mixed negative and positive news events almost always net out as bad news in the public opinion. If you are unclear how the tide of sentiment is turning on a company or sector, exercise caution, because as they say in real estate, one bad house on the block can lower property values for everyone.

4. Links you can use

Home Sales Slow, 28 States See Declines
Fed Takes Break on Interest Rates

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