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Taking Some Off

The duo look to trim one stock that's heading into earnings, and another that's in the midst of an acquisition deal.
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Revlon shares are trading 11 cents higher to $2.56 a share, and we're going to take action: The company is slated Tuesday to report earnings results for the fourth quarter and full-year 2004, and we want to sell 500 shares here for a 7% gain, as we said we would in the Weekly Summary.

We believe management is doing all of the right things to turn around this once-ailing consumer products play. Part of Revlon's turnaround plan is to spend heavily on marketing and advertising to rebuild its brand awareness with consumers. We believe investors may shy away from the company when they see the impact this increased spending will have on fourth-quarter EBITDA (earnings before interest, depreciation, and amortization) results, and we don't want to have such a large position going into the earnings call.

That said, we believe the marketing will gain traction with consumers and lead to strong results in the second half of 2005, and will look to add back these shares on a move below $2.25 a share.

One more note: We are also going to sell another 300 shares of Quantum (QTWW) here at $5.83, leaving us a total of 1,200 shares. We were buying the stock at $5.30 a share as recently as the middle of last month. The company just announced that its shareholders have voted in favor of the Starcraft deal, and we wouldn't be surprised to see shares retreat a bit here as investors back away until the deal closes later this month.

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