My Stock Winners

ESOL INTERNATIONAL (ESIT:PK)
Web Site: www.esolinternational.com
Current Estimated Market Capitalization: $368,999,000
Approximate Shares Outstanding: 45,000,000
Authorized Shares: 200,000,000
Estimated Float: 2,757,761
(Source: Pinksheets.com as of 5-3-2007)

CORPORATE OVERVIEW

Esol International, Inc. (ESIT) incorporated in Nevada in 2002, is now the parent company of two wholly-owned subsidiaries. The first is J.G. Capital Inc. (JGC) and the other wholly-owned subsidiary is International Country Club Corp. (ICCC) which has developed a Membership Program for people seeking an affordable international country club experience.

Together, the two subsidiary companies have created and developed an incredible international resort investment opportunity for stock and real estate investors alike. What we’ll focus on is the opportunity available to stock investors through the ESIT shares.

ESIT divisions will thrive off of each other in a very symbiotic way. Dynamic growth will be achieved by the ICCC Membership Division, and also through ICCC’s resort real estate development and sales, as well as financing and investment activities through J.G. Capital. Though Esol is the parent company, J.G. Capital is the financial arm of the triumvirate, and has provided the capital necessary to acquire the 4,500 acre property now being developed by ICCC as the Monarch Cancun Resort.

MARKET OPPORTUNITY

ICCC operates two of the three business divisions parented by Esol International focused on achieving explosive growth. The first is the International Country Club Membership Program, a “first of its kind” service that provides more privileges and benefits than one could ever get from joining a single country club, for far less money. For an initiation fee of $2,500 and only $175 per month, the ICCC Membership Program provides each member with full benefits and privileges in their own prestigious private country club in Cancun, Mexico under the Monarch brand name - The Monarch Cancun Resort. The Membership Program also provides access to over 3,500 private country clubs around the world through its reciprocation agreements with these clubs. The club privileges aren’t limited to golf, but also include racquet and tennis clubs, yachting, equestrian, and world class spas around the world.

ICCC has targeted and developed the Program to be affordable worldwide for people averaging $60,000 in income per year or more. ICCC believes this price point to be particularly important to attract “baby boomers” and retirees as well as any one else looking for luxury and relaxation at an affordable price. ICCC’s goal is to attract 1,000,000 international members over the next five years, a number that would generate over $1 billion in sales to the Company.

In the U.S. market alone, the 70,000,000+ “baby boomer” generation is now starting to hit their retirement years. For the majority of these people, joining an expensive country club doesn’t make sense. Many exclusive private clubs cost tens of thousands of dollars in upfront fees in addition to expensive monthly dues. These folks are literally priced out of the market, although ICCC research has shown that many would still like to enjoy the country club lifestyle from time to time. That’s what makes the ICCC Membership Program so attractive. It’s all about affordable luxury.

That leads us directly into the second segment of ICCC’s business, the real estate development division. The Monarch Cancun Resort is in the center of the 4,500 acre property that has been subdivided into an 8,000 residential lot destination community. The Monarch Cancun Resort Community is an affordable gated and secured luxury, second home, retirement or investment opportunity that is becoming available to millions of people in the U.S. and internationally.

ICCC has set the price for the pre-sell lots at $99,900, which is about 30-40% below market comparables in the area. Once the first phase is sold out, the price of each lot will be raised to a minimum of $115,000.

ICCC has created a plan whereby a home buyer can purchase a three bedroom hacienda for a total cost under $200,000. This property is only about twenty minutes from the heart of Cancun, the international airport, and the private Monarch Beach Club. The pricing at Monarch Resort is around $600,000 less than most of the homes in Cancun and is a mere fraction of the cost of prime Cancun beachfront property, yet just minutes away.

ICCC plans to establish the Monarch brand as the affordable resort alternative and as a result, many influential international real estate investors have keen eyes focused on the project. As sales of the affordable Monarch Cancun project begin to roll out, ICCC has plans to establish Monarch Resorts and Communities in other similar destination location spots around the globe.

INVESTMENT CONSIDERATIONS

While ICCC builds out its Membership Program towards a goal of achieving $1 billion in sales over the next five years, JGC is also poised to benefit by providing financing and assistance to private Mexican companies looking to go public on an international exchange. In ESIT’s real estate division a sell out of the 8,000 lots in the Monarch Cancun Project would project over $500,000,000 in profits alone. The profits from new homes built on the 8,000 lots, combined with the potential for other new Monarch Communities, lends to a bright future for ESIT shareholders.

ESIT plans to achieve significant growth from the vast, virtually untapped, affordable, high destination, resort community market. This opportunity was recognized by one of the world’s largest real estate firms, RE/MAX, who will market the opportunity through 6,600 offices and 120,000 sales professionals worldwide.

There are currently under 50,000,000 shares of stock outstanding in ESIT, according to their recent un-audited financial statement. The Company had nearly $90,000,000 in assets, about $3,700,000 in short term notes, and no long term debt. We will be the first to tell you that this is extremely rare for a company trading in the U.S. on the Pink Sheets. But that is also the real opportunity for early investors. Stocks in good companies have a tendency to go up and that’s exactly what ESIT has done.

A year ago, ESIT moved from about $4 per share to the $6 level where it held for the past six months. On the basis of the RE/MAX agreement and other news, ESIT broke out of a six month base and spurted to a recent high of $8.20. On a fully-diluted basis, an $8 share price translates into a $400,000,000 market capitalization.

The future looks extremely bright both for the Company and for those who decide to enter the stock here. The ICCC Membership Program has the potential to generate upwards of $1 billion in revenue alone in the next few years, while its real estate division could also chip in close to $1 billion in revenue. On the back end, JGC has the opportunity to provide hundreds of millions of dollars of profits by assisting private companies in going public.

As the company continues to execute its growth plan and its vision of creating an affordable luxury resort community is achieved, the market capitalization of the company should expand. Much will depend on the rate at which the company gains sales traction with both the Membership Program and sales of the Monarch Cancun Community development. Successful near term results could easily enable Esol International’s market cap to double from current levels.

It should be pointed out that ESIT is making plans and believes it is qualified financially for listing on a U. S. national exchange. According to management, there are estimated to be less than 2,800,000 shares in the trading float. With a strong balance sheet and as news about the company spreads, long-term investors should feel comfortable tucking away shares at current levels.

CONCLUSION

Esol International Inc. represents an excellent buying opportunity for investors to participate in the significant growth potential of international destination real estate. Successful execution of their business plan could easily transform the company into a multi-billion dollar international real estate and investment conglomerate.

Telecommunications (TTH)
Bullish
Sector trading above its…
20-day Moving Average: YES
50-day Moving Average: YES
100-day Moving Average: YES

Sentiment: Pessimism dominates the sentiment backdrop of the telecommunications sector despite its impressive technical uptrend. In fact, Wall Street has turned its back on the components of this sector. Of the 160 analysts ratings on the components of the Telecommunications HOLDRS Trust , less than 31 percent come in at a “buy,” while an impressive 10 percent rate them a “sell.” This bearish configuration leaves ample room for potential upgrades. What’s more, the number of the exchange-traded fund’s (ETF’s) shares sold short jumped sharply in April, pushing its short-interest ratio even higher. This growing short interest underscores the pessimism that continues to surround the sector.

Outlook: Technically speaking, the ETF quickly rebounded last week, scrambling back above support at its rising 20-day moving average to tag a fresh five-year high. The sector remains in a long-term uptrend, rising along the support of its ascending 10-week and 20-week moving averages. As pessimism toward telecommunications stocks unwinds, it should add more buying pressure, keeping the group aloft.

Utilities (UTH)
Bullish
Sector trading above its…
20-day Moving Average: YES
50-day Moving Average: YES
100-day Moving Average: YES

Sentiment: Skepticism is extremely heavy in the sentiment backdrop of the utilities sector. Wall Street has placed some heavy bets against the group as only 27 percent of the 181 analyst ranking on the components of the utilities sector come in at a “buy.” Any upgrades from this dour group could help to add more lift to this sector. Despite the fact that the number of Utilities HOLDRS Trust shares sold short dropped by 12 percent in April, the ETF still has a hefty short-interest ratio, pointing to high levels of pessimism among short sellers.

Outlook: After recently hitting a new all-time high, the ETF pulled back to support at its rising 20-week moving average and is currently resting on support at its ascending 10-day moving average. This short-term trendline should help to carry the trust through the 150 level once again. In addition, an unwinding of the existing pessimism toward the sector should help to fuel further gains in the sector.

Airlines (XAL)
Bearish
Sector trading above its…
20-day Moving Average: NO
50-day Moving Average: NO
100-day Moving Average: NO

Sentiment: Optimism permeates the sentiment backdrop of the airline sector despite its weak technical performance. Wall Street is enamored of the group, as roughly 52.5 percent of the analysts ratings on the components of the sector come in at “buy.” Any downgrades from this optimistic pack could fuel additional losses in this group. Options players have yet to levy heavy bearish bets against the group as the composite Schaeffer’s put/call open interest ratio sits lower than roughly 60 percent of the readings taken during the past year. This complacency against the sector’s weak technical backdrop has bearish implications from a contrarian perspective.

Outlook: The AMEX Airlines Index bounced back last week, climbing above the 50 level. However, it is currently contending with resistance at its 10-day and 20-day moving averages. Furthermore, the rebound in the index failed to carry it back above its 100-week moving average. A rejection at this trendline could result in further downside as the remaining optimism unravels in the form of increased selling pressure.

The broad market refuses to be de-railed. The S&P 500 Index (SPX) tacked on 0.78 percent during the week, and even managed to close above the 1,500 level. The Dow Jones Industrial Average (DJIA) has finished four of the past five sessions higher, or eight of the past 10, or 23 of the past 26 trading days were gainers. In fact, the Dow jumped more than one percent last week and continues to hit successive record highs to the grumbling of Wall Street analysts. Technicians are worried about the streak and what this could be foretelling, as other technicians fret about the “sell in May and go away” seasonality that has not come about. Others are worried about market’s disconnect with slowing economy, gas prices above $3, and earnings quality (earnings in large-cap companies being driven by weak dollar and strong overseas growth).

What has many analysts ruffled is that this uptrend has beaten the odds and expectations. We entered the earnings season with expectations for growth of approximately 3.7 percent, but currently, SPX component earnings are coming in above seven-percent growth.

Furthermore, economic reports have been a somewhat mixed bag recently. While the latest Institute of Supply Management reports for the both the manufacturing and services sectors came in stronger than expected, the preliminary first-quarter Gross Domestic Product (GDP) came in at a measly 1.3 percent, which marked the slowest growth since the first quarter of 2003. Even April’s nonfarm payrolls were nothing to shout about, increasing by just 88,000 ?the slowest pace in more than two years.

Meanwhile, investment advisors can hardly be classified as being overly bullish. The latest Investors Intelligence poll showed that the percentage of bullish advisors increased slightly to 51.7 percent. However, the biggest jump showed up last week among those who believe the market is due for a correction, increasing to 23.6 percent.

Additionally, we have begun to once again see a steady uptick in odd-lot shorting activity. As I’ve mentioned in previous editions of this column, short interest on both the New York Stock Exchange and Nasdaq has risen sharply during the past couple of months. This buildup of bearish positions leaves the market with ample sideline money available that can still come in and push the market higher. In fact, the current behavior of the short players in this market is looking very similar to their behavior at the tail-end of the correction in May-June 2006 and the recent February-March correction. In other words, even as the market grinds to new highs, the shorts are displaying fear that is consistent with corrective phases in the market that have ultimately marked bottoms.

Furthermore, the CBOE Market Volatility Index (VIX) continues to hold firm in the 13 area and this has very bullish implications. With the VIX still around 13, the market now has more upside potential before encountering the “single-digit VIX” headwinds we have seen in the past. Perhaps this elevated VIX level can be explained in terms of the uncertainties still associated with earnings reporting season, or by the fact that investors have “learned their lesson” from the 2/27 market plunge and are no longer going to accept a single-digit VIX in these “riskier times.” But in the end, I believe any such explanation only supports my position that complacency has by no means set in, and this has very bullish implications for the staying power of this rally.

This week’s big news will likely prove to be the conclusion of the Federal Open Market Committee meeting on Tuesday. The Fed is widely expected to keep rates unchanged at 5.25 percent, considering that the latest economic reports showed a slight moderation in inflation levels (though inflation is still above the Fed’s comfort zone of one to two percent) and mixed economic strength. With the Fed content to maintain its wait-and-see attitude, the market is free to continue its ascent.

========= Undervalued Candidate #1 ==========

———– Parker-Hannifin Corp (NYSE: PH) ———–

Insider 1 Name: Donald E. Washkewicz
Insider 1 Position: Chairman
Insider 1 Action: 3,400 shrs on 4/27/2007
Insider 1 Total Holding: 141,724 shrs

Insider 2 Name: Linda S. Harty
Insider 2 Position: Director
Insider 2 Action: 5,000 shrs on 4/25/2007
Insider 2 Total Holding: 5,000 shrs

——————————————————-
Undervaluation Merits…

P/E Ratio = 13.5 (Industry Average 18.0)
P/S Ratio = 1.00 (Industry Average 1.12)
P/B Ratio = 2.31 (Industry Average 2.56)
P/CF Ratio = 9.60 (Industry Average 13.60)

Industry: Industrial Equipment & Components

——————————————————-
Other Merits…

Dividend Yield = 1.20%
Exceeded Analysts’ Estimates for Past 5 Quarters
Analyst Expectations On Rising Trend

———– Parker-Hannifin Corp (NYSE: PH) ———–

Upside Trade
TARGET 1 Price: 21.92 Profit: 4.4% , for a typical rally.
Stop Limit/Trailing Stop Limit: 20.68 Loss: 1.5%
Profit/Loss Ratio: 2.9 : 1 - Good

TARGET 1 POTENTIAL Excellent, there are 0 resistance areas on the way to Target 1.
Stocks may quickly rise to Targets when there are not many resistance areas blocking the way.

TARGET 2 Price: 22.16 Profit: 5.5% , Profit/Loss Ratio: 3.7 : 1 - Good
for an extreme rally.

Telecommunications (TTH)
Bullish
Sector trading above its…
20-day Moving Average: NO
50-day Moving Average: YES
100-day Moving Average: YES

Sentiment: Pessimism dominates the sentiment backdrop of the telecommunications sector despite its impressive technical uptrend. In fact, Wall Street has turned its back on the components of this sector. Of the 161 analysts ratings on the components of the Telecommunications HOLDRS Trust (TTH – 37.83), less than 31 percent come in at a “buy,” while an impressive 10.6 percent rate them a “sell.” This bearish configuration leaves ample room for potential upgrades. What’s more, the number of the exchange-traded fund’s (ETF’s) shares sold short jumped sharply in April, pushing its short-interest ratio even higher. This growing short interest underscores the pessimism that continues to surround the sector.

Outlook: Technically speaking, the ETF pulled back slightly last week, breaking through support at its rising 20-day moving average as investors took some profits off the table. However, the trust has support in the form of its 50-day trendline rising into the region, which should help to buoy the shares in the near term.

Utilities (UTH)
Bullish
Sector trading above its…
20-day Moving Average: YES
50-day Moving Average: YES
100-day Moving Average: YES

Sentiment: Skepticism is extremely heavy in the sentiment backdrop of the utilities sector. Wall Street has placed some heavy bets against the group as only 27 percent of the 181 analyst ranking on the components of the utilities sector come in at a “buy.” Any upgrades from this dour group could help to add more lift to this sector. Despite the fact that the number of Utilities HOLDRS Trust (UTH – 148.70) shares sold short dropped by 12 percent in April, the ETF still has a hefty short-interest ratio, pointing to high levels of pessimism among short sellers.

Outlook: During trading last week, the ETF hit yet another all-time high, breaking through the 150 level before pulling back slightly on Friday to digest some of its gains. The trust is trekking higher along the steadfast support of its ascending 10-day and 20-day moving averages An unwinding of the existing pessimism toward the sector should help to fuel additional gains.

Airlines (XAL)
Bearish
Sector trading above its…
20-day Moving Average: NO
50-day Moving Average: NO
100-day Moving Average: NO

Sentiment: Optimism permeates the sentiment backdrop of the airline sector despite its weak technical performance. Wall Street is enamored of the group, as roughly 62 percent of the analysts ratings on the components of the sector come in at “buy.” Any downgrades from this optimistic pack could fuel additional losses in this group. Options players have yet to levy heavy bearish bets against the group as the composite Schaeffer’s put/call open interest ratio sits lower than roughly 60 percent of the readings taken during the past year. This complacency against the sector’s weak technical backdrop has bearish implications from a contrarian perspective.

Outlook: After being rejected by resistance at the 56 level and its declining 50-day moving average, the AMEX Airlines Index (XAL – 50.11) dropped sharply, breaking through former support at the 52 level. In fact, the index is now trading at its lowest level since October 10. In the index is also below its 100-week moving average, leaving it vulnerable to additional downside as the remaining optimism unravels in the form of increased selling pressure.

Last week, there was no celebrating. There were no cheers or 20-point font headlines exclaiming the news that the Dow had busted through the 13,000 level for the first time ever. Past breakouts had been met with a great deal of hoopla on Wall Street, but this one seemed to pass with more of a cringe and a groan, which is more encouraging than the rampaging enthusiasm that accompanied the technical breakouts we saw in the early months of 2000.

Caution on the Street is rampant, as investors ponder the seeming disconnect between the economy and decelerating earnings growth with a stock market achieving new milestones. The Dow Jones Industrial Average (DJIA) punched through the 13,000 mark on Wednesday and stayed above that level for the remainder of the week. In fact, the Dow has finished 11 of the past 12 trading sessions with a gain. And these impressive gains have come amid concerns of a weakening dollar and a weakening economy. Even the dreaded “R” word (recession) is being batted around the financial press with increasing regularity.

Money managers have grown extremely skeptical during the most recent leg of the market’s uptrend. The latest Big Money poll reveals that only 46 percent of professional investors surveyed consider themselves bullish or very bullish, which is down sharply from 64 percent in autumn. In fact, the neutral percentage has spiked from last fall’s 20 percent to 37 percent.

What’s more, individual investors remain skeptical of the upside that we have seen. An article in Barron’s over the weekend pointed out that for a fifth straight week, money flowed out of domestic stock mutual funds.

Signs of pessimism can be seen elsewhere. The New York Stock Exchange (NYSE) saw April short-interest activity jump to another record, increasing by 4.6 percent.

These low expectations have helped to fuel the rally as earnings have come in stronger than expected. In some cases, the weak dollar has added positively to multinationals bottom line, which has only raised more cautionary flags as analysts fret over the quality of earnings. When the reporting period started, analysts had predicted growth of roughly 3.3 percent from components of the S&P 500 Index (SPX). Now, Thomson Financial is stating that when the final count is in, first-quarter earnings reports are likely to be up by approximately seven percent.

Furthermore, we are headed into another week heavily laden with economic reports. Today, the core PCE Inflation report will be closely watched for inflation levels, while Tuesday’s Institute of Supply Management report and Friday’s nonfarm payrolls will be perused for signs of life within the economy. The low expectations of analysts and traders makes it easier for surprises and rallies in the market. Additionally, considering the hedging activity we continue to see, the likelihood of hard pullbacks and panic selling has been reduced.