"Street Critique" Hilary Kramer, Market Strategist and Author of "Ahead of the Curve."
Wednesday, March 19, 2008PAUL KANGAS: With the financial markets as volatile and crazy as they've been, tonight's "Street Critique" guest says why not buy stocks that pay you to own them? She's Hilary Kramer, market strategist and author "Ahead of the Curve." Hilary, welcome back to NBR.
HILARY KRAMER, AUTHOR, "AHEAD OF THE CURVE": Thank you, Paul.
KANGAS: Since the last time we spoke, the Fed has cut rates sharply, Bear Stearns imploded and stocks knocked their best one-day run up in over five years just yesterday. What do you make of all of this?
KRAMER: Well, you want to always respect the market action. And the stock market is telling us that it may very well have bottomed out. And it is starting to already price in a recovery to the economy, the forward indicator in 2009 and 2010. So it doesn't mean we are not to the going to have a recession or a consumer-led recession, but the stock market is showing us that there is some improvement there.
KANGAS: So how does the individual investor cope with this manic market?
KRAMER: You want to be very careful on the stocks that you buy. As a trader, we respect the market action. So again, we had a sign yesterday, a sign of light. So we may have bottomed out. And you also just want to buy what you know and what you like and have immense conviction on the names that you buy.
KANGAS: I understand you like dividend-yielding stocks. Tell us about that.
KRAMER: Yes, I do. It is a great opportunity right now. One company is PNM Resources. The ticker symbol is PNM. This is a 9.25 percent annual dividend yield. PNM is the electric utility of New Mexico. They even supply electricity to Texas, but the regulator in New Mexico decided not to approve a full rate increase that PNM had requested. The stock is 10. It's been as high as $34 in the past 52 weeks. And believe me, Paul, they are going to be using electricity and they have heat waves in New Mexico.
KANGAS: OK. Tell us about a second choice.
KRAMER: JPMorgan, JPM, the ticker symbol, 3.8 percent dividend yield. The stock is at $43. If you think about it, this is a company that the Fed chose to work with for the bailout of Bear Stearns. Jamie Dimon is a brilliant CEO. And you have to always look at what the market is telling you. JPMorgan is the most solvent and the most, it has all the leadership right now.
KANGAS: All right, how about another selection.
KRAMER: Suburban Propane (SPH). This is one of my favorite companies whenever anybody asks me for a safe play, a company to buy and put away, I always say SPH.
KANGAS: Look at that yield.
KRAMER: This is the one, 8.5 percent dividend yield. It is a company that has been around a long time. Everybody loves the management. They're as good as gold. The company came off again even today, down at 36. It's been as high as close to 50 and you are talking about a company that has a business that is a captive business. They deliver the propane. You put in your tank. You are going to need propane delivered. Off course, the other businesses as well.
KANGAS: And we have time for a final stock briefly.
KRAMER: OK, Targa Resources. Now the ticker symbol on this is NGLS. Targa Resources has a dividend yield of 7.5 percent and is a natural gas gatherer and deliver down in Texas. Now Goldman Sachs has picked this as their top choice of all the energy companies globally. So that is how I noticed it.
KANGAS: Hilary, do you own any of the stocks mentioned or have any other disclosure to make?
KRAMER: I do not own any of these stocks, but they are bargains and I intend to be buying soon.
KANGAS: Thanks for joining us and we'll see you soon again.
KRAMER: Thank you, Paul.
KANGAS: My guest Hilary Kramer, author of "Ahead of the Curve."
