Gavin Graham Dow Inc. (Formerly Dow Chemical) (DOW-N) DOW-N WEAK BUY Sep 30, 2002

Shares popped last Friday on hopes that China's stimulus plans can boost Dow, a stock that has been slumping lately.

The best time to buy this is right now, at the start of rate-cutting, which will boost housing and products associating with home-building like appliances and carpets which require chemicals. Also, China's stimulus is a boost to cyclicals levered to China's economy.

Still sells at 20x PE. Estimates keep going down, because of China--stocks that have any association with China tend to hurt. That said, if this stock reaches a 7% dividend yield, you must buy.

It's tied to China, like all materials stocks are, and those stock keep going down. Don't touch this until at least January.

It's broken. When a stock's broken support, you don't want to buy it.

Like the other chemical companies, DOW is trading as if they are just calls on China turning around. This is wrong to do.

It's near-9% dividend yield is too big. Something is awry here.

Not sure it's going to rally the way AT&T did. Very different sectors. In his modelling, he's been in accumulation mode. Likes it at these levels on a risk/return basis, screens well for value. High yield is probably a risk factor at this point. Not a lot of upside potential to analysts' price target.