"Street Critique" -Hilary Kramer, Market Strategist & Personal Finance Editor at AOL
Wednesday, October 31, 2007PAUL KANGAS: With oil prices over $94 a barrel, tonight's "Street Critique" guest says now is the time to start looking at alternative energy stocks. She's Hilary Kramer, market strategist and personal finance editor at AOL. And welcome back to NBR, Hilary.
HILARY KRAMER, PERSONAL FINANCE EDITOR, AOL: Thank you, Paul.
KANGAS: Before we get to alternate energy, what did you make of today's rate cut?
KRAMER: The rate cut today, that was just noise for all of us. The market caught a bid and has this bull ending because it was the last day of the month and so (INAUDIBLE) a good month and as well for mutual funds, there was the end of their year, so everyone wanted to see Google go above $700 a share.
KANGAS: That it did. We spent the last two weeks looking at energy options like coal and nuclear power. As a market strategist, you specialized in another energy option, alternative and renewable energy. Why is that?
KRAMER: Because alternative energy has become mainstream. It has become accepted worldwide, globally. There's legislation that's helping it become another option to traditional fossil fuel.
KANGAS: Let's get right to your stock picks. Power Secure International, what do they do and why would you be a buyer here?
KRAMER: The ticker symbol is POWR. For everyone who is a value shopper, this is a value stock. What Power Secure does is they help with the delivery of electricity, so it's done less expensively, more efficiently, and therefore, it's alternative energy because it makes traditional energy cheaper, more efficient and therefore, we use less traditional fuel.
KANGAS: Understood. How about another selection?
KRAMER: OK, LSB Industries (LXU). LXU is a $26 stock, $27 at the end of the day today. I see LXU easily going to $40 because they make the geothermal pump. And geothermal is going to see a lot of capital infusion. It's a very important method of alternative energy and so we always want to buy the equipment that helps with the alternative energy and that's LXU.
KANGAS: And your next pick, Applied Materials (AMAT) on the NASDAQ market. How is AMAT an alternative energy play? I always thought it was a semiconductor play.
KRAMER: Applied Materials is now totally a solar play. And Applied Materials, AMAT at $19 it's a bargain. It's an absolutely cheap stock, easily should be $25 to $30. What Applied Materials does -- and they receive $600 million for doing it this past year -- is they make the equipment that the solar companies need to cut their silicon which becomes the thin film solar panels. So AMAT is critical in the chain and they've just beaten every number, even their own internal estimates. So AMAT us really one of the cheapest stocks out there today.
KANGAS: And finally, we just have about 45 seconds left, your last stock is a Swiss issue, Meyer Burger (MBTN.SW) technology. Why do you like it and is it easy for an American investor to buy it?
KRAMER: Today it's a lot easier to buy a stock internationally because most of the brokers allow for that and it's easy enough to pay the foreign issue (ph). The reason I like Meyer Burger which actually manufactures the saws and the cutting material, the precision cutting for the silicon, it's a very, very important company and I see upside there at least 50 percent. It could be going for $500 U.S. Goldman Sachs sees 82 percent upside, so for me, Meyer Burger is my top choice.
KANGAS: Hilary, do you own any of the stocks mentioned or are you short any of them?
KRAMER: Not short. I'm long all of these and these are all stocks that I'm putting my own money into.
KANGAS: OK, it's great to see you again, Hilary.
KRAMER: Thank you, Paul.
KANGAS: My guest, Hilary Kramer, author of "Ahead of the Curve" and personal finance editor at AOL.
