"Street Critique"- Hilary Kramer, Personal Finance Editor at AOL
Wednesday, September 05, 2007JEFF YASTINE: Tonight`s "street critique" guest thinks this summer`s bumpy ride will not only continue, but get worse. She`s Hilary Kramer, personal finance editor at AOL and author of the new book, "Ahead of the Curve." Hilary, welcome back to NIGHTLY BUSINESS REPORT.
HILARY KRAMER, PERSONAL FINANCE EDITOR, AOL: Thank you, Jeff.
YASTINE: You know, let`s talk about the markets for a moment. Everyone is banking on a rate cut by the Fed at its next meeting in two weeks. Do you think that will happen and will it make that much of a difference?
KRAMER: Yes, Jeff, we will see a rate cut take place. The problem is that it`s already baked into the market. That`s why we had an up day yesterday, a big swing up last week at the end of the week. So, it`s not going to do anything, and then the pendulum might swing the other direction. So everyone should be aware and be careful.
YASTINE: So you don`t sound especially bullish. You sound somewhat bearish in fact.
KRAMER: I`m bullish in the long term, bullish on the U.S. economy long-term, but short-term it`s really going to be a buying opportunity for anyone who has a little cash set aside for the favorite stocks that they want to pick up if we have the kind of correction that may be coming to the market.
YASTINE: Briefly, a recession you think we may have?
KRAMER: It`s very possible especially because the consumer spending is diminishing. The consumer doesn`t have as much money in the wallet right now.
YASTINE: All right, with that in mind, let`s move to your theme today, which is recession-proof or at least recession resistant stocks. Give us your first pick.
KRAMER: OK, Casella Waste Management. Garbage may not be sexy, but it can make you a lot of money in a recession and in a bull market, especially a company like Casella. The ticker is CWST. I love Casella at $11. This is a stock that recently as yesterday, (INAUDIBLE) an analyst there put a $20 price target on Casella because it`s a small player in the northeast in waste management and you have these big players like Waste Management (WMI) that could easily come in and take over Casella, so it`s a buyout opportunity and even if it`s not, the garbage still has to be picked up in recessions and in bear markets.
YASTINE: All right, let`s see what your next one is here.
KRAMER: OK, FPL Group. FPL is a dividend play. FPL is the utility that supplies energy to the Florida area, plus they`re the wind business there and I`m expecting to see the wind business be spun off. So, you have a little up-side coming and FPL is off $10 from its high. FPL will also come back in a rate cut. Utilities go up when rates are cut.
YASTINE: Now, what is your third one? It`s Suez?
KRAMER: OK, Suez, Suez. The ticker symbol is SZE. Suez is a French company that built the Suez Canal. It`s still out there in emerging markets and strong growth economies, building electrical plants, waste management, water filtration. This is a utility. This is an energy company. It just had a merger that was announced this week with GDP and it`s now the third largest utility potentially in the world with $100 billion of revenues and Suez is a bit undervalued right now. The stock came off with the announcement of the merger. There`s a little up-side opportunity there.
YASTINE: I got about 30 seconds left. Your last one, I hope I`m pronouncing it right, Veolia Environment.
KRAMER: OK, in 30 seconds, this is one of my absolute favorite stocks. VE is the sticker symbol. You have a 3.2 percent dividend yield. Veolia Environment is your best way to play China. Veolia Environment is building the water purification and water waste treatment plants in 17 cities in China. They`re doing desalinization in the Middle East, Australia and Indonesia. Veolia Environment (VE) is a wonderful recession-proof stock with a lot of up-side out there and a company many don`t know because it`s French but you can buy it right here in the U.S. exchange. YASTINE: And Hilary, any disclosures on these.
KRAMER: I own FPL.
YASTINE: All right, Hilary, thanks for joining us. We`ll see you again on Wednesday September 19th. Our guest Hilary Kramer, author of "Ahead of the Curve.
