In the firm’s equity income allocations, the firm is selling 100% of its allocation in American Electric Power Co. (NYSE: AEP) at $41.14 and is adding in Williams Companies Inc. (NYSE: WMB) at $28.22.

As far as growth and income, Argus is recommending to buy CSX Corp. (NYSE: CSX) at $23.32 and Monsanto Co. (NYSE: MON) at $79.00; and it is recommending that the model portfolio sell all of its positions in Occidental Petroleum Corp. (NYSE: OXY) at $97.17 and Weyerhaeuser Co. (NYSE: WY) at $19.18.

Finally, in mid-cap growth the firm’s model portfolio is buying VeriFone Systems Inc. (NYSE: PAY) at $37.12 and buying MDU Resources Group Inc. (NYSE: MDU) at $21.50.  It is selling 100% of its position in IntercontinentalExchange Inc. (NYSE: ICE) at $113.13.  Another selling stock, but only by 20% of its allocation is Hain Celestial Group Inc. (NASDAQ: HAIN).

Speaking of model portfolios, here were the 5 most undervalued DJIA stocks and the 5 least attractive DJIA stocks based upon consensus targets.  Here are the top 4 DJIA stock picks from Jim Cramer for 2012.

Also, we made a lot of changes this year to the 24/7 Wall St. 2012 Model Dividend Portfolio.

JON C. OGG

Less than three months ago, electricity distributor MDU Resources(NYSE:MDU) increased its full year EPS guidance from $1.85-$2.10 to$2.10-$2.35. This morning when the company released third-quarterearnings, it lowered its 2008 guidance to a $1.95-$2.10. Atthe time MDU issued guidance, natural gas prices were above $9/thousandcubic feet; today’s price is under $7/thousand cubic feet. Crude priceshave fallen even further.

EPS for the quarter missed analysts’ estimates of $0.67 by threepennies, and revenue were only a bit lower than expected. But MDUofficials blundered in August and the company is paying for it today.The share price is down more than 4% so far today.

After the market closed yesterday, coal-supplier Massey Energy(NYSE:MEE) reported third quarter earnings of $0.64 EPS on revenues of$763 million. Analysts expected EPS of $0.73 and revenues of $771million. But the company’s year-over-year increases were startling: EPSnearly tripled and revenues were up more than 26%.

Massey indicated guidance on shipped coal for 2008 will be at thebottom of its earlier estimates, and that average prices would be about$1/ton lower. Cash costs per ton remained about the same. For 2009,Massey stuck with previous estimates on shipments, but lowered the topof is average price by $10/ton and lowered its cash costs by $4-$6/ton.

The lukewarm guidance hasn’t hurt the share price today. Massey stock is up more than 10% mid-morning.

Massey is very far off of highs to the tune of almost 75% and it sellsto utilities.  MDU has "only" been cut almost in half.  It seems thatwith the beaten up energy supplier sector in coal or oil or gas thatthe stocks are getting more of a pass.  Maybe the market is finallystarting to factor the bad news in at current prices.

Paul Ausick
October 31, 2008