"Street Critique"-With Hilary Kramer of AOL
Wednesday, December 13, 2006PAUL KANGAS: AOL's personal finance editor Hilary Kramer has been a regular street critique guest with us since September. So tonight we're going to look at how some of her stock recommendations have done. And Hilary, welcome back to NBR.
HILARY KRAMER, AOL: Thank you, Paul.
KANGAS: On your first visit in September 6, we talked about the home builders and the potential impact of a cooling in the housing sector. You gave us some names to own for the long term and said you still saw some downside, but these stocks broke out in late October. What happened to the cooling in the housing market? Do you see a change in sentiment there?
KRAMER: Well, in the new construction with mortgage rates at a seven- year low and also built in to these prices is a recovery in 2008, not 2007.
KANGAS: Right, well, Hovnanian was at the top of that board and that was your favorite stock, so you did very well. Do you still recommend them?
KRAMER: I love Hovnanian. It's right in the right socioeconomic areas and a great builder.
KANGAS: Also in the home- related sector you liked Lowe's over Home Depot and both are up. Home Depot doing a little better. How do you explain that?
KRAMER: There were some rumors around Home Depot Paul, especially with some possible takeouts there. So that's what gave Home Depot a bigger boost.
KANGAS: You're still with them both.
KRAMER: Yes, especially Lowe's.
KANGAS: Now back on October 4, you tackled the energy sector with issues you thought still had room to run and all are nicely higher. Are you sticking with them? Look at these gains, CNOOC and Petro, Lone Star, El Paso, Portland, all good gains.
KRAMER: There is still opportunity in the energy sector. We haven't seen the end of the run of oil prices. We could see $70 a barrel, but there's also more consolidation coming along. But I like Portland General the best. That's more of a utility play that's been low profile. It was a spin out of Enron.
KANGAS: OK, now, on your next visit, we looked at high-end retail names. And the first several Saks, Tiffany and Ralph Lauren you said to avoid. You were right on Saks which is down a bit, but Tiffany and Lauren are both up and Lauren moving to record highs recently on some brokerage upgrades. What do you say now, still avoid?
KRAMER: Still avoid those stocks and really it's just Christmas holiday expectations, big shopping. And after the New Year I think we're going to see them come down.
KANGAS: It won't be a holiday for the stocks. OK. Then you had the big winner and that was Four Seasons, a takeover play, up over 28 percent. That was a great call.
KRAMER: Thank you. I see that there's going to be more takeovers. There's a lot of money out there, private equity money and they're looking for acquisitions just like Four Seasons.
KANGAS: Now your only clinker in your first three visits was Ruth Chris, the steak house chain. It's down slightly since October. Do you still like it?
KRAMER: I just like Ruth's Chris. I see opportunity there for a takeover, for consolidation. It's just simply that money has moved to other fine dining stocks. That's the only reason it's down.
KANGAS: OK. Very, very interesting, Hilary. Incidentally do you own any of these stocks or have any other disclosures to make?
KRAMER: None of these stocks but I love the steak at Ruth's Chris.
KANGAS: OK. We'll watch it closely. You have a very fine record and we appreciate your being with us again.
KRAMER: Thank you, Paul.
KANGAS: We'll see you in a couple of weeks for your best bets for 2007. My guest Hilary Kramer, personal finance editor at aol.com.
