Holiday Portfolio: Carrizo Ahead in the Polls

The next catalyst for Altria is the spinoff of the Kraft (KFT) division, now slated for March 30. With New Kraft CEO Irene Rosenfeld at the helm, the future for Kraft is bright, and that should help Altria shares as the spinoff nears.

Softness in Mr. Softee

The only red ink in the 2007 Holiday Portfolio comes from Microsoft (MSFT), which is down about 2% on the year. The concern stems largely from the slow adoption of Vista, the new Windows product, and CEO Steve Ballmer's recent comments about Vista revenue expectations being somewhat aggressive.

Nobody can be really surprised about Vista compatibility issues in the early stages. While it may take time to work through the kinks, Vista will be successful, and Microsoft will ultimately be the winner. We're in the early days of a software upgrade cycle that will eventually make its way through millions of computer users and provide incremental revenue -- and income -- for Mister Softee. Patience here is likely to pay off later in 2007.

Portfolio Alums: Point Your Compass North

After I suggested more than a year ago that it could happen, Compass Bancshares (CBSS), a 2006 Holiday Portfolio alum, was acquired Friday by an Argentina-based bank. The $9.6 billion deal means Compass shareholders will receive about $71.82 per share, a 49% gain since I first profiled the stock in January 2006.

In addition, Compass shareholders collected a 3.23% dividend along the way. As is always the case, it's time to move on from Compass. Take the profits and look for the next stock that will head north. (Note: My firm has made a market in Compass Bancshares.)

Regional bank consolidation is likely to continue. We'll take a look at some other names potentially in play in the coming weeks.

Happy Presidents Day.

P.S.: After sifting through hundreds of reader emails, I'm almost ready to choose the reader's pick for the portfolio. I'll have another column for you with that choice, along with some interesting and insightful excerpts from your many excellent responses.

	Recent Price	Price 12/31/2006	Price Change	Current Dividend	Current Yield	Yield At Cost
Altria (MO:NYSE)	$86.00	$85.82	0.21%	$3.44	4.00%	4.01%
Archstone-Smith (ASN:NYSE)	$60.91	$58.21	4.64%	$1.81	2.97%	3.11%
Bank of America (BAC:NYSE)	$53.91	$53.39	0.97%	$2.24	4.16%	4.20%
Carrizo Oil & Gas (CRZO:Nasdaq)	$31.45	$29.02	8.37%	$-	0.00%	0.00%
Microsoft (MSFT:Nasdaq)	$29.25	$29.86	-2.04%	$0.40	1.37%	1.34%
Unweighted Average			2.43%		2.50%	2.53%
S&P 500			2.25%
Source: Company Reports, Bloomberg, TSC Research

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