Setting Price Targets

Stocks are trading lower across the board Monday, with the major market averages down more than 2%. Small-caps are not faring much better, with the benchmark Russell 2000 index off more than 3%.

We're not taking any action in this Alert, but wanted to provide some insight about recent news items for several model portfolio names. We also want to offer readers price targets where we'd look to buy some One-rated names.

The key is that we'd rather see a second down day before buying, because it's been more than two months since there have been two consecutive 1% daily declines in the S&P 500. It's also options expiration week, which often brings added trading volatility, so better buying opportunities are possible.

Running down a few One-rated names, Del Monte (DLM) is the only company in the model portfolio trading higher on the session today. The company had its estimates and price target boosted at the brokerage Morgan Stanley this morning.

Epiq Systems (EPIQ) could trade down toward $15 in the near term, at which point we'd consider adding 100 shares.

Imax (IMAX) is unchanged on the session at $7.00, following a story in "The Wall Street Journal" that the company is close to announcing a partnership deal in China. We already have a 100% gain in sizable position in the model portfolio, but the stock remains attractively valued, changing hands below the recent $7.15 equity offering price.

Kenneth Cole (KCP) is trading right at its average cost basis in the model portfolio, and we'd look to buy 200 shares closer to $6.50.

Mylan (MYL) is being sued by Pfizer (PFE) in order to try and block Mylan from offering a generic version of the cholesterol drug Lipitor. Legal battles are a way of life in the generic medicine business, and while Mylan is already one of the largest positions in the model portfolio, we believe it would be attractive to purchase closer to $12.

Take-Two (TTWO) is approaching the $7.50 level, where we said last week that we'd make a secondary purchase.

Finally, Two-rated Yamana Gold (AUY) looks attractive to purchase at current levels, for readers who don't own it at lower levels. We're up more than 100% on the 350 shares currently in the model portfolio, and will hold off taking any further action at this point.

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