Lear Corp Wants to be Apple Inc

Ascendere Model Portfolio Daily Update:  February 1, 2011

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Of Note:
JP Morgan initiated coverage of Ares Capital Corporation (ARCC) today with an Overweight rating and $19 price target.

Williams-Sonoma Inc. (WSM) approved a $125 million stock repurchase program today after completing a $65m repurchase program previously announced in September 2010.

We expected a positive first day of monthly trading, as we noted yesterday, and were not disappointed.  The S&P 500 closed up 1.67% and our theoretical long models finished up 2.22%. This content is for members only.

Lear Corp. (LEA) reported a better than expected quarter today but provided guidance unchanged relative to its January 11 Deutsche Bank conference presentation.  Consensus is currently at the high end of the guided range which was not raised, so the tepid market reaction is probably reflective of this.  In our opinion, it's tough to keep a lid on fundamental momentum in whichever direction, so we would expect higher revisions to guidance to be made over the course of the year.  In other words, we are accusing Lear of borrowing from Apple Inc.'s (AAPL) investor relations playbook.  Don't be fooled.

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About this report
This daily update is a supplement to a monthly report issued on January 30, 2010 that details the model portfolio strategies of Ascendere Associates LLC (“Ascendere”).  For more information, please see our list of frequently asked questions, suggested tips on using our newsletter or an interview with us on Covestor Live.  See also our long-only model based on actual trade data. Please see our disclosures and disclaimers at the back of this report.