"Street Critique" With Hilary Kramer, Personal Finance Editor at AOL
Wednesday, January 31, 2007PAUL KANGAS: While they've been risky in the past, tonight's "street critique" guest has some biotech names that she says are worth looking into. She's Hilary Kramer, market strategist and personal finance editor at AOL. Hilary, welcome back to NIGHTLY BUSINESS REPORT.
HILARY KRAMER, PERSONAL FINANCE EDITOR, AOL: Thank you, Paul.
KANGAS: Before we dip into the biotechs, any thoughts on today's Fed decision and its accompanying statement.
KRAMER: Absolutely. I this Wall Street believes what it wanted to hear which was that rates were not going to rise. Rates have to go up. We have inflation and we also a deficit. It's inevitable. That's the direction we're going and the stock market is going to adjust ultimately once it digests and understands that that's where we're going.
KANGAS: Do you think that stocks are overpriced right now?
KRAMER: Absolutely. We have a stock market that's much too frothy, that's gone up much too quickly. And there's a lot of money out there that's going global and that we have to compete against.
KANGAS: Clear words of caution. Now, why are you taking a second look at biotech? I know for a long time you've advised investors to stay away. Why are you taking this second look at it?
KRAMER: I still say biotech is very risky. It's only for those that have capital that they're willing to lose. Biotechnology has lost people fortunes, but there are some new companies out there worth at least taking a look at.
KANGAS: Let's get specific.
KRAMER: OK, Medivation, MDV, that's my favorite of the four that....
KANGAS: On the American exchange.
KRAMER: Yes, Medivation is a San Francisco-based company. The CEO Dr. David Hung, he claims that the medication that he has actually reverses the neurological damage from Alzheimer's. It has been a medication used for 20 years in Russia, an antihistamine, but what it is here is that smart money is going into it. So I myself have taken a shot because I'm watching those that know what clinical trials really are saying.
KANGAS: You won't be the only one watching. How about Cadence Pharmaceutical, I know you like that.
KRAMER: Yes, I love Cadence, CADX. This is a company that has gone out into the international market and in licensed different products including an intravenous Tylenol, an acetaminophen that will be introduced here on the market.
KANGAS: There's no question what this next company does, the Medicines Company.
KRAMER: Yes, this company, also another biotechnology, biopharmaceutical that has a product which is an anti-coagulant that is used in angioplasty. And many believe it might actually compete ultimately against heparin which has been around for a hundred years.
KANGAS: And you're also looking at Seattle Genetics.
KRAMER: Yes, SGEN and this is an oncology biotechnology company that has quite a number of drugs in the pipeline at different phases in clinical trials and that's why I like it, the diversity and the management team.
KANGAS: We just have 30 seconds left. These charts look a little bouncy, very volatile stocks. Does that scare you?
KRAMER: It does scare me, but it's still worth trying but again, it's money that can be lost. It is risky. When one of them hits it, it hits it big, Paul.
KANGAS: Hilary, do you own these issues personally or have any other disclosure to make?
KRAMER: I have decided to try my luck on MDV, Medivations, following the money.
KANGAS: All right, Hilary, good to have you back. We'll see you again next month.
KRAMER: Thank you, Paul.
KANGAS: My guest, Hilary Kramer, personal finance editor at AOL.
