S A ADVISORY April - May 2002


S.A. Advisory
2274 Arbor Lane #3
Salt Lake City, Utah 84117


On March 01, 2002, we formed a new portfolio in order to follow a number of investment opportunities that have gotten caught up in the "Enron Disaster".

During early March many stocks were pummeled because of irregular accounting practice paranoia. Due to this occurrence, many stocks, in our opinion, reached juicy levels that we could not ignore. Wall Street, like usual, is wrong, and in many cases we at S. A. Advisory prove to be profitably RIGHT! Please review our collection of five opportunities. Most have moved up from our March 01, 2002 e-mail alert, but still, in our opinion, offers excellent upside potential. Our selections: ELN, TYC, CPN, AEJ and MCIT.

Symbol 52 wk range shares outstanding short position book cash/sh Recommended
ELN 12.01 - 65.00 322 mil 8.48 mil 8.76 4.96 14.10 13.91 B
TYC 22.00 - 60.09 2 bil 38 mil 17.61 1.59 29.10 32.32 B
CPN 6.15 - 58.04 305 mil 89 mil 9.48 1.56 7.35 12.70 B
AES 3.40 - 52.25 534 mil 62 mil 10.39 2.83 5.12 9.00 H/B
MCIT 5.52 - 19.33 118 mil N.A. 19.55 .06 6.89 5.91 B

Note: All values taken from YAHOO financial page/profile of each featured company.

1. Elan Pharmaceutical - worldwide pharmaceutical company engaged in discovery, development and marketing of products in the therapeutic areas of neurology, pain management, oncology, infectious diseases and dermatology. Clinical development programs are on going in the fields of Alzheimer's disease, inflammatory bowel disease and others. Revenue for year ending December 31, 01 rose 22% to $1.86 billion - net income/sh after charges .97. On a proforma net income .59. Earning estimate for 02 $1.49; for 03 $1.80. Numerous lawsuits pending for questionable off balance sheet activities. We believe that the street has discounted the worst. ELN is no Enron. We see little downside risk at current levels and rate ELN with a Buy at current levels.

2. TYCO International - diversified manufacturing and service company. TYCO is the world's largest manufacturer and servicer of electrical and electronic components, undersea Telco systems and specialty values. TYCO is a provider of fire protection systems and electronic security services. The company also holds strong leadership in disposable medical products, financing and leasing capital, plastics and adhesives. TYCO operates in more than 100 countries and had fiscal sales in excess of $36 billion and net income/sh of $2.17 for fiscal 01. For 1st quarter of 02, revenue equalled $10 billion and net income/sh equalled .70. Earnings/sh estimates for fiscal 02 ending September equal $3.89. Another stock that Wall Street questions about smoke and mirror accounting. We believe stock price discounts mirage "like" accounting problems. TYCO is a winner and a true bargain at current levels. The Wall Street herd is headed in the wrong direction. We rate TYCO with a Buy recommendation. PS: numerous lawsuits pending.

3. Calpine - engaged in the generation of electricity in the US and Canada. CPN power generation is dedicated to natural gas-fired power generation. The company is the world's largest producer of renewable geothermal energy and owns and markets 1.3 trillion cubic feet of proved natural gas reserves in Canada and the US. For year ending December 31, total revenue equalled $7.6 billion and newly released earning (March 28, 02) after reclassification equalled $1.85/sh. For year ending Dec 02 earnings are estimated at $1.59, while 03 numbers

  come in at $1.97. Accounting concerns, restatements, debt rating reduced and, of course, the usual lawsuits have poured cold water on the stock appreciation of CPN. We believe with the current positive news on the economy, high fuel costs and Wall Street "Selling out" on the "Enron Syndrome" that CPN will continue to "steam" ahead. An added bonus is the monstrous short position that, of course, can and will "fuel" any advance in CPN shares. We rated CPN with a buy rating at current levels.

4. AES Corporation is a global power company that is in the business of electricity generation and distribution for fiscal year ended 12-31-01 revenues rose to $9.33 billion while net income/sh after all charge equalled .51. Earnings estimates for 02 come in at $1.42/sh while for 03 earnings estimate equals $1.71. As the world economy resurfaces into a growth mode, this bodes well for energy use. AES has investment throughout the world and some are somewhat risky. The company has debt problems and appears to have a cash crunch. AES needs to sell assets, but not greatest time to do so. We recommended AES at $5.12. At present AES trades at $9.00. We would not chase and would buy on any weakness. AES is more risky than our other selections. We currently rate it as a Hold/Buy.

5. MCI Group - retail and wholesale communications services, including long distance voice, local voice, wireless messaging, private line services and dial-up Internet access services. The company was separated from WorldCom, Inc. during June 2001 (considered a tracking stock). For year ending 12-31-01 revenue fell 15% to $13.83 billion and before accounting charges totaled $23 million in loss or (.20)/share. Everyone is worried about accounting problems and cash flow. The Street is paranoid about the extremely rich dividend (yield at present double juicy 40.61%). The dividend is stated at $2.40/year. Management has stated dividend is secure for the rest of the year. Has already declared the June payment and recently went x-dividend on the April payment. It is obvious that the dividend at some point in time will shrink, but Wall Street assumes WCOM and MCIT are going out of business because phone and Internet usage will disappear. MCIT offers investor yield and in my opinion capital appreciation at current levels. We anticipate much needed layoffs from both WCOM and MCIT near term in order to more align the current business environment. We rate MCIT with a buy rating at current levels.

Websites for Stocks mentioned:

www.elan.com; www.aesc.com; www.tycoint.com; www.worldcom.com; www.calpine.com

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