"Street Critique" -Hilary Kramer, Author of "Ahead of the Curve."
Wednesday, April 02, 2008PAUL KANGAS: Our "Street Critique" guest has brought our viewers many stock picks in recent weeks. So, tonight, we thought we'd see how her recommendations from the first quarter have been doing. She's Hilary Kramer, market strategist and author of "Ahead of the Curve." And Hilary, welcome back to NIGHTLY BUSINESS REPORT. HILARY KRAMER, AUTHOR, "AHEAD OF THE CURVE": Thank you, Paul.
KANGAS: The first quarter was a rough one for the markets as we know. The Dow dropped almost 8 percent, NASDAQ down over 14, Standard & Poor's 500 lost almost 10 percent. It was a rough time for stock pickers. But let's get right to the review. In early January, you were looking at stocks that could move higher on a potential Fed rate cut at its late January meeting. Let's see how those stocks have done. We'll see you like Goldman (GS) which is down a bit, been a lot higher in the meantime. Apple (APPL) down 17.8 percent. Jacobs Engineering (JEC) you still like those?
KRAMER: I love these companies especially Goldman Sachs which is best of breed could go back up easily over 200. Apple, the same. It has a lot of momentum behind it. Everyone thinks they're going to make a lot of headway in the PC market. And Jacobs Engineering is a phenomenal opportunity could easily to go $100. Everyone sold off engineering and construction companies thinking we're in a recession. But we're not in a global recession.
KANGAS: You also like Kaydon (KDN), Google (GOOG) and Applied Materials (AMAT) and Applied Materials did very well in this time frame. Let's have look at those three charts and look at that, up 23.7 percent on Applied, very good. You still like these?
KRAMER: Yes, Kaydon especially. This is a ball bearing company that has all the market share for ball bearings for the wind industry. Google, I'm not as ambitious on but certainly Google has 100 points to come back here. It doesn't have that same momentum and love behind it like Apple does. Applied Materials is a phenomenal way to play the solar industry. They make the ingredients that go into the solar panels and Applied Materials could easily go to $25 from here.
KANGAS: All right. When we spoke on January 23rd, you thought a bottom was forming in the market and you liked some upbeat plays in the tech market particularly the volatile solar stocks like Sun Power (SPWR) and First Solar (FSLR). I want to note the first time you recommended First Solar on September 19th of 2007 that stock was trading at $100 a share and you repeated your recommendation on Apple at that time, are you still with these?
KRAMER: Yes. Sun Power and First Solar are your best ways to play pure play solar, especially First Solar which is thin film. Sun Power has more upside to it. At $80, it could go easily go up to 120. Remember, that has been cut in half.
KANGAS: First Solar now over $240 a share.
KRAMER: That's right.
KANGAS: Early in February, you said while a bottom was forming, it was a little bit too early to start bottom fishing the home builders, financials and retailers you didn't give any new picks, but how are you feeling about those sectors now?
KRAMER: Well, Paul, the financials have certainly bottomed out. Anybody who wants to venture back in, go ahead. You know my choice which is Goldman Sachs, go for the cash machine. But you want to stay away from retailers, stay away from home builders. Remember, we're in a consumer and real estate-led domestic recession.
KANGAS: In February 20th with oil over $100 a barrel, you like some energy plays, namely Petrobras (PBR), the big Brazilian oil firm. You liked Orion Energy (OESX) and you repeated your recommendation on First Solar. Do you still like these?
KRAMER: Yes. Petrobras is a company that I own in my personal portfolio. I'm stocking away, because I want it because I want the Brazilian exposure, emerging markets, a great way to play big oil. And on First Solar of course, you know how I feel about that going to $300 at $250 today and Orion, oh yes that's my small cap absolute favorite. I see it double here. It just went down to (INAUDIBLE) new IPO and they make efficient light.
KANGAS: We have less than a minute left. March 19th, you suggested some dividend paying stocks with upside potential and they have done really well. Let's have look at PNM Resources (PNM) up 39 percent. Still like it?
KRAMER: PNM is phenomenal but you've made over 40 percent, over 40 percent in two weeks, sell it. Don't be greedy.
KANGAS: All right. Do you own any of the stocks we've mentioned or have other disclosure to make?
KRAMER: Yes, I own all of these stocks except for Jacobs Engineering (JEC), (PNM), JPM and Suburban Propane (SPH).
KANGAS: You took some profits I know.
KRAMER: I did. And very briefly do you think we turned the corner here, yes or no?
KRAMER: Yes especially for the next few weeks. But expect a big bomb to drop something else will happen besides the Bear Stearns. Be careful and again, take that money off the table.
KANGAS: Thanks for being with us again. My guest, Hilary Kramer, author of "Ahead of the Curve."
