ONES:

Abbott Laboratories (ABT:NYSE; $55.43; 400 shares; 0.79%; Sector: Health Care): Management presented at an industry conference this week and reiterated guidance for both of its divisions (medical devices and pharmaceuticals) and reaffirmed the year-end target to complete the company split. The presentation also highlighted the company’s robust pipeline: 1,000 new branded generic product introductions over the next few years, 40 new innovations in nutritionals and a strong pharma pipeline. The presentation confirmed our conviction about the quality and value of the company. Shares normally don’t act very well into quarter reports, so we’re waiting for the report or share price weakness. Our target is $62.

American Express (AXP:NYSE; $49.76; 1,700 shares; 3.02%; Sector: Financials): Consumer credit grew $20.4 billion in November, much more than expected. Consumers have renewed confidence, likely moving in correlation to better jobs and a better stock market, and they are taking on more debt while continuing to spend. This is an important statistic for American Express, as the company’s performance relies on expanding its billed business. We expect a solid showing of this metric for the company when it reports next Thursday. Analysts expect revenue of $7.9 billion and earnings of $0.98 per share. The long-term secular growth of credit and card payments makes this name one of our favorite financial holdings – we’re a buyer if the quarter does its typical “sell on the news” as it continues to cap upside as it reinvests in its business and in growth. Our target is $55.

Broadcom (BRCM:Nasdaq; $31.83; 2,900 shares; 3.29%; Sector: Technology): The company’s guide of negative 4% sequential growth in the fourth quarter (recall that it increased this guidance last month) could prove conservative on strong wireless demand from Apple and several Chinese manufacturers. Plus, -4% is well below the seasonal average of +4%. The macro concerns surrounding the Thailand flood should abate after the first quarter, positioning the company well to outperform, and shares rallied nicely this week in anticipation of this. The secular trends remain intact: strong growth in wireless connectivity and mobile data usage. Shares trade at 11x 2012 earnings, trough levels, with $6 per share in cash. Our target is $40.

ConocoPhillips (COP:NYSE; $70.34; 500 shares; 1.25%; Sector: Energy): Chevron lowered guidance this week, taking ConocoPhillips down with it, citing weakness in its refining/downstream and chemicals results. ConocoPhillips is splitting into two in order for investors to be better able to appreciate its solid upstream business, and in the low $70s, it has largely discounted weaker downstream operations. We expect further asset sales and dividend increases this year and better appreciation for its exploration-and-production results. We added to the position and will continue to do so, as it trades at 8.2x 2012 estimates, well below the group average of 15x, a bargain level. Our target is $80.

DuPont (DD:NYSE; $48.40; 1,700 shares; 2.93%; Sector: Industrials): Positive data points from the auto sector (Borg Warner, Dana, a seasonally adjusted annual rate of 13.5 million) and housing bodes well for DuPont in its performance materials and performance coatings segments. A tight titanium oxide market, nine price increases over the last year (including one implemented for January 2012) and limited supply as well as a strong agriculture market also benefit DuPont, along with record low natural gas prices. With so much going its way and a cheap valuation, we continue to recommend buying it. Our target is $55.

EMC (EMC:NYSE; $22.25; 4,700 shares; 3.73%; Sector: Technology): Similar to other technology names in the portfolio, such as IBM (IBM:NYSE), EMC has been slowly shifting the focus of their business mix to higher-margin services and software. This can be seen in gross margin expansion from 52.4% in 2009 to 55.4% in 2010 and likely even better in 2011. Services revenue grew 20% year over year last quarter to $1.4 billion, while product revenue was up 13%. Although the product segment is still the main business division and almost doubles the revenue of services, the gross margin expansion will lead to stronger earnings growth and, we believe, multiple expansion. Shares trade at 15x 2012 estimates, well below their 24x average. Our target is $30.

Ensco (ESV:NYSE; $47.55; 2,200 shares; 3.73%; Sector: Energy): Most analysts are in agreement that there will be an ultra-deep-water (UDW) rig shortage this year. Ensco is highly levered to the UDW market with three impressive rigs available in 2012, including the DS-6, which will likely get a contract and earn a day rate north of $500,000. We believe that shares could rerate in the new tighter drilling market environment this year. The company is also estimated to take an impressive $2 billion in free cash flow over the next two years, proving its strong book. Shares trade at 6.7x enterprise value to EBITDA, equal to the group average. It deserves to trade at a premium because of its younger, high-tech fleet. Our target is $60.

Eaton (ETN:NYSE; $48.71; 1,400 shares; 2.43%; Sector: Industrial): We added shares this week to take advantage of the developing bullish auto cycle. Since 11% of its revenue is tied to the automotive market, the uptick in production will give a material boost to revenue. Eaton has a superior product portfolio focused on high technology, energy efficiency and reliability. The strength of the portfolio gives it strong pricing power, which is key in this high- priced commodity environment. The company has a geographically diverse footprint, with 50% of sales derived from the U.S., 24% from emerging markets and $1 billion in revenue from China. Shares trade at 12x 2012 estimates, a discount to the group average of 13x. Our target is $55.

Express Scripts (ESRX:Nasdaq; $49.15; 2,300 shares; 4.03%; Sector: Health Care): At a large industry conference this week, the company reiterated the synergy estimates for the Medco Health (MHS:NYSE) deal as well as the timeline, expecting the deal to close in the first half of the year. Management also touched on the Walgreen (WAG:NYSE) dispute, noting that after the first week of the new year, it is still confident that 95% of script volume will continue without Walgreen and that it intends to lower health care costs over time, a goal it says that Walgreen was preventing. Express Scripts will be the largest pharmacy benefit manager in the game once the Medco deal closes (we think it unlikely that the deal will be blocked), and it will benefit from $2 billion in deal synergies. This is the premium name in the PBM universe. Shares trade at 16x 2012 estimates, below the group at 19.5x. Our target is $55.

Energy Transfer Partners (ETP:Nasdaq; $47.13; 700 shares; 1.18%; Sector: Energy): As was widely assumed, the Federal Trade Commission cleared Energy Transfer Partners’ sale of its propane business to AmeriGas this week. The only stipulation to the allowance was that ETP retain its cylinder exchange business so that AmeriGas wouldn’t corner the cylinder market. The propane segment represented about 15% of operating income and was sold for $2.9 billion. This deal marks progress for ETP toward shedding commodity- linked businesses in favor of units that carry more long- term fixed-rate contracts such as those associated with its pipelines (much more attractive for investors master limited partnerships). Shares trade at 12.8x distributable cash flow, a discount to the group. Our target is $52.

Fluor (FLR:NYSE; $53.54; 2,000 shares; 3.82%; Sector: Energy): The backlog has been steadily growing since the first quarter of 2010, from $25.7 billion to $42 billion last quarter. This impressive performance comes while most of the competition has seen flat or negative backlog growth recently. Fluor has favorable end-market exposure, especially to the oil-and-gas segment, which will likely see massive project capex this year. The company is in line for a number of large energy-related rewards with current front-end engineering and design (FEED) and early-works projects in Australia, UAE and Iraq. The group rallied on the large liquefied natural gas deal at KBR, and we believe that with elevated commodity prices, more deals will be announced throughout 2012 in the group, and Fluor will take the lion’s share. Our target is $70.

Freeport-McMoRan (FCX:NYSE; $42.00; 1,600 shares; 2.40%; Sector: Basic Materials): Shares are up over 14% year to date as the massive overhang of work stoppage at one of its biggest mines has been removed. The company reports fourth- quarter earnings next Thursday, and expectations call for $3.8 billion in revenue and $0.70 in earnings per share. Production numbers will obviously be down this quarter after the strike, but we expect strong guidance from management. Shares trade at 5.0x enterprise value to EBITDA and could really pop if management lays out production guidance above the peak levels from last year. Our target is $55.

International Paper (IP:NYSE; $31.49; 1,100 shares; 1.23%; Sector: Materials): We added this new position to the fund for its large exposure to the U.S. economy (80% of revenue), deal synergies from a number of major acquisitions last year and its healthy dividend yield (3.35%). This is the one of the largest paper companies in the world, servicing about a third of North America’s containerboard supply and a fourth of its uncoated free sheet (UCFS) paper supply. The firm also has a large and growing presence in the BRIC nations — Brazil, Russia, India and China — with 24% market share of UCFS paper in Russia (plus another 10% share with its Russian joint venture LIim), market leading position in UCFS paper in Brazil and growing capacity in both China and India. The company sees a robust future for the industry, with 1%-2% global box market growth per year. The company has a strong book — it currently has $1.9 billion in free cash flow and near-record EBITDA generation in 2011. Shares trade at 11.9x 2012 estimates, in line with the group, though it deserves a premium. Our target is $70.

Schlumberger (SLB:NYSE; $67.99; 1,300 shares; 3.15%; Sector: Energy): Management reports fourth-quarter earnings next Friday, and estimates call for revenue of $10.8 billion and earnings per share of $1.10. We look for North American revenue to continue to pace the growth, behind increasing permitting in the Gulf of Mexico. We also expect continued bullish commentary on global deep-water markets, where the company has a 60% share. While the fourth quarter is seasonally the weakest, we expect that conditions are improving internationally and in the deep water, where margins should see expansion. Our target is $82.

Stanley Black & Decker (SWK:NYSE; $71.60; 900 shares; 2.30%; Sector: Industrial): We added shares this week to continue to build out this position. The company has positive leverage to the housing and construction market. It has 40% market share in the construction/do-it-yourself segments and is in a winning position as the dynamics improve. With a dominant position in security products and its services offerings, margins should expand, and business should become sticker. With the impressive synergies and cost savings from its three recent acquisitions (Black & Decker, CRC Evans and Niscayah), earnings have a cushion, cash flow is significant, and organic growth will expand. Shares trade at 13.9x 2012 estimates, below the average of 15.2x. Our target is $77.

Unilever (UN:NYSE; $32.09; 3,100 shares; 3.55%; Sector: Consumer Staple): We took advantage of two downgrades this week to add shares of this defensive holding, a leader in consumer products. It’s well-positioned with strong products, global expansion and price increases. This will lead to above-average organic growth, and yet it trades at a 10% discount to its peers. With a very strong growth profile, impressive 3.5% dividend yield and strong presence in important emerging markets, shares deserve premium valuation. Our target is $37.

Weyerhaeuser (WY:NYSE; $20.22; 2,700 shares; 1.95%; Sector: Materials): Housing stocks continued to rally this week, and Weyerhaeuser gained ground again as mortgage applications rose 4.5% in the first week of 2012. More data come out next week, including housing starts and home sales for December, which will be additional important data points for the housing segment. Weyerhaeuser has prime Pacific Northwestern timberland as well as growth potential through its cellulose fibers business. By converting to a REIT structure in 2010, the company is able to avoid excess tax while paying out a healthy 3% dividend (with upside potential). Despite the run-up in shares, it remains a buy, given the 29% discount to net asset value. Our target is $23.

Yum! Brands (YUM:NYSE; $61.23; 600 shares; 1.31%; Sector: Consumer Discretionary): Chinese growth is what will drive the stock this year; 40% of its profits are tied to this region (65% internationally). The company posted same-store sales growth of nearly 20% for the last two quarters in the region, and we expect similarly high results this quarter. Price increases will help mitigate high labor and commodity costs, and margins should stabilize as a result. The turnaround in the U.S. will be slow, but any progress seen will be met with enthusiasm. Our target is $65.

On behalf of all the patients and families served by the Aflac Cancer Center and Blood Disorders Service of Children’s Healthcare of Atlanta let me express warm appreciation to you for conveying a $1,925.00 donation which represents proceed from 2011 Tournament. We are deeply grateful for your support.

Your gift enables Children’s to strengthen our fight against cancer and blood disorders, offering patients and their families c1inica1leadership and advanced research they need and deserve. Your support of the Aflac Cancer Center helps provide the full physical, emotional and spiritual support they need – at one of the most stressful times of their lives.

The dream we share to end cancer and blood disorders in children all over the world will be realized because of your thoughtfulness. Thank you for being a part of this urgent work.

With warmest best wishes for this coming holiday season.

Sincerely,

Lauren Griffin

Development Officer

Six Benefits of Exercise

     1. Wakes You Up. If you feel too fatigued to do anything after a long day of work, spending 20 minutes just two or three times each week performing some form of exercise will increase your endurance and your energy will skyrocket.

     2. Exercise Makes You Smile. Reach for your sneakers instead of a Snickers when you’re feeling down, stressed or angry. A study performed at Duke University shows that just eight to ten minutes of strenuous exercise can dramatically reduce negative feelings and make you feel better. Exercise releases chemicals from the brain known as endorphins, which naturally make you feel good.

     3. Exercise Helps Prevent Cancer. Regular exercise proves to be a key factor in cancer prevention. Research continues to confirm that exercise reduces the risk of developing cancer. Researchers theorize that it may boost the immune system’s ability to detect and kill cancer cells.

     4. Exercise Soothes Arthritic Joints. Stretching exercises, swimming and range of motion exercises all help to reduce arthritic pain and increase joint mobility. Strength training builds muscles and keeps joints moving well.

     5. Exercise Keeps You Young. As we grow older, our bodies manufacture less human growth hormone (HGH), a substance that improves our immune system, builds muscles, burns fat and contributes to our general feeling of well-being. Lower body exercises with weights can help slow down age related decline by stimulating the production of HGH.

     6. Exercise “Knocks You Out.” Exercise helps you sleep better. Studies from the University of Arizona, Tucson, found fewer sleep disorders among young men and women who took exercise classes or who walked briskly at least six blocks each day.

Fascinating Facts To Think About…

An active lifestyle has many benefits. People who devised ways to integrate activity into their daily life, such as briskly walking the dog or frequently pulling weeds made fitness gains similar to those put on a specific exercise regimen, according to The Cooper Institute for Aerobics.

Naturally lowering blood pressure is possible through good nutrition. A low-fat diet rich in fruits and vegetables can lower blood pressure significantly, according to studies done by the National Heart, Lung and Blood Institute.

Sleep stabilizes appetite-regulating hormones, according to a study in the Annals Of Internal Medicine. In subjects who slept four hours on two consecutive nights, levels of lepton (the stoplight for eating) were 18 percent lower and levels of ghrelin (the hunger trigger) were 28 percent higher than when they spent ten hours in bed. The sleep-deprived group reported feeling hungrier for calorie and carbohydrate rich foods. Source: Natural Health, May 2005

What not to do for the flu. Taking aspirin or acetaminophen may prolong the flu up to three and a half days, according to the study in Pharmacotherapy. It’s reported that the drugs interfere with the body’s infection-fighting power. Researchers recommend sticking to time-honored cures instead: bed rest and lots of liquids.