"Street Critique"-Hilary Kramer's small and mid-cap finds
Wednesday, November 15, 2006PAUL KANGAS: When it comes to investing, tonight's street critique guest says it's a stock-pickers market. Joining me now Hilary Kramer, market strategist and personal finance editor at aol.com. Hilary, welcome back to NBR.
HILARY KRAMER, PERSONAL FINANCE EDITOR, AOL.COM: Thank you, Paul.
KANGAS: This week, you brought our viewers some small and mid cap stocks they've most likely never heard of. But you say they're poised to break out to the up side. How do you find these stocks and why do you like them?
KRAMER: I do fundamental research. I screen out, try to find the best growth stories. I also look for top management and great entrepreneurs leading these companies.
KANGAS: OK, let's get to the names. First up CKX Incorporated (CKXE). What does this company do?
KRAMER: This is a likeness of Elvis Presley. They own Graceland. CKXE also has Muhammad Ali, American Idol and it's poised to break out as they take the name of Elvis and make it more popular than ever before.
KANGAS: Stock's been strong recently. You're not afraid of that big rise, huh.
KRAMER: Oh, no. There's room for this one to double.
KANGAS: Then Covanta or Covanta Holdings (CVA), another management story, is that not true?
KRAMER: Right. I love this company. We have Sam Zelin (ph) there. This is waste management. This is waste to energy. This is where we're going. A lot of indices, a lot of companies are going to be picking up this company. And they like it. (INAUDIBLE) $3 billion and there's room for Covanta to grow.
KANGAS: OK. And then Chicago Bridge and Iron (CBI) is one of your favorites.
KRAMER: Right. This is an 1889-founded company. It's construction. It's engineering. They have contracts all over the country and they're still as strong as ever and they're doing a lot of upgrades, which makes sure that they have, you know, inventory and they are really poised to run over the next year.
KANGAS: OK. Your next choice was Digirad (DRAD).
KRAMER: This is a real small - this is a real small cap, Paul. But basically this is the nuclear imaging, the cardiovascular nuclear imaging. And according to a lot of the medical equipment analysts, they see this one as the one ready to break out.
KANGAS: A larger cap issue you like is Watson Pharmaceuticals (WPI) which has had a rough time of it recently.
KRAMER: Right. WPI, but Watson is in the right area. It could be an acquisition target. This is a company that's in anti-smoking cessation. They're an anti- -- you name it, they're a pain management, antibiotics. It's a strong one and also ready to move.
KANGAS: OK. Clean Harbors (CLHB) is another one that you like and it's had a pretty good run recently.
KRAMER: Right. It's really on the top of its chart. It's very strong but at the same time they're in the right area, hazardous waste management.
KANGAS: OK and Flowers Foods is one of your favorites (FLO).
KRAMER: Right. This is a distribution story. This is a bakery. They do rolls. They do desserts and they have lots of customers, especially the big companies, the Costco type companies. It's a wonderful distribution story, Georgia-based company.
KANGAS: All right and we have time briefly for Cantel Medical (CMN) which has had a rough time.
KRAMER: Cantel is terrific, again another acquisition target and they do everything from the bids for the dentists to syringes and they clean up medical equipment.
KANGAS: OK. Do you own any of these stocks or have any other disclosure to make?
KRAMER: Yes. CVA, Covanta, Chicago Bridge and Clean Harbors.
KANGAS: Very good. Hilary, thanks for being with us tonight. You've really done your homework as usual. We'll see you again on November 29.
KRAMER: Thank you, Paul.
KANGAS: My guest Hilary Kramer, personal finance editor at aol.com.
