Andrew,
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TRADE ALERT #14
GUIDANT CORPORATION (NYSE - GDT)
June 5, 2001
11:45AMET - emailed to TFR Trade Alert Subscribers

NOTE - DELAYED DELIVERY: This information was previously distributed
to Fagan Report Trade Alert Subscribers at the above noted time and
date. Due to ever-changing market considerations - it may or may not
be applicable at this time.

TRADE ALERT #14 - Speculative Buy / Guidant Corporation (NYSE - GDT),
currently trading at $38.00 with a target above $45.00 and a stop-
loss at $34.20.

Guidant Corporation (GDT) is a global leader in the medical
technology industry providing innovative, minimally invasive, and
cost-effective products and services for the treatment of
cardiovascular and vascular disease. In short, GDT is involved with
just about everything and anything used to prevent and treat heart
attacks. With over 8,000 employees worldwide, it posted revenues in
excess of $2.5 billion for FY00. Net earnings after tax were $374.3
million. Earnings per share came in at $1.24 on a fully diluted
capitalization of 307,722,000 issued shares. Q1/01 numbers, for the
three month period ended March 31/01, are on track to produce similar
or slightly better results for FY01. Working capital at March 31/01
was $454.6 million. Total current and long term liabilities were $1.2
billion of which $350 million is expected to be paid off from cash
flow during FY01. At its current price of $38.00, it has a P/E of 32.
The only way to understand GDT is to spend an hour or two on its
website (www.guidant.com)

My thinking on this trade is that GDT will more than likely produce
better numbers this year than it did last year. Yet, at its current
price of $38.00 it is trading about 15% less than its 1999/2000 low
of $45.00. If it gets back to $45, there will be a 20% gain on the
trade. GDT's 52-week high/low stock price is $71.81/$33.00. As money
continues to rotate out of the tech sector and other economy
sensitive stocks, established medical companies like GDT should trade
higher.

Some subscribers get extra nervous trading higher priced stocks like
GDT. Remember that price is not an important consideration. The only
considerations that matter are the dollar amount of the trade and the
resulting percentage gain or loss. If you normally limit your trades
to $5,000 per transaction that's fine. Buy 130 shares of GDT. We have
a 10% stop loss limit on this trade so you are risking about $500.
The next reporting period for GDT is for the three-month period
ending June 30, 2001. If the numbers come in better than expected, we
could make 15% to 20% in 60 to 90 days. I'd be very happy with that
on this trade.

SUBSEQUENT NOTE: Wednesday morning, June 6, a day after this Trade
Alert was issued, CNBC reported that Bank of America had just
released a Buy recommendation on Johnson & Johnson. One of the
reasons given for the recommendation was that J&J has increased its
market share of the "heart surgical stent" market at the expense of
GDT. I think that is the reason for the weakness in today's GDT
market. The above recommendation on GDT remains unchanged, but one
should try to get the best entry price possible.

NOTE / DISCLAIMER All information published by The Fagan Report is
for informational purposes only. As Editor, I, Brian Fagan, tell you
what I am or would be doing if I had sufficient capital to do so. You
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Wishing you all the best,
The Fagan Report,
Brian Fagan
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June 5, 2001

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