"Street Critique"-Hilary Kramer. Author of "Ahead of the Curve"
Wednesday, April 16, 2008PAUL KANGAS: In an environment of high flyers and shooting stars, tonight's "Street Critique" guest says there are some stocks that have been around for more than a century that still have upside potential for the long term. She's Hilary Kramer, market strategist and author of "Ahead of the Curve." Good to see you again, Hilary.
ILARY KRAMER, AUTHOR, "AHEAD OF THE CURVE": Thank you, Paul.
KANGAS: Before we get to those stocks, there is a growing belief that the worst of the credit crunch could be over for the financials and the broader market overall. Are you seeing that here or is that just wishful thinking?
KRAMER: Well, Paul, because the stock market is a forward indicator, it's pricing in a recovery year and a half, even two years out, yes, we will see the stock market continue to rise. Plus, we've got a long way to go upwards because we're still then 6 percent on the year on the S&P 500, but that being said, the financials can still be tricky. You know I only own one and that's Goldman Sachs. There's some more shoes to drop and we also have to be very, very careful in the retail and consumer discretionary area, because we're into a consumer-led recession, which is going to be very different from a stock market which might turn into a bull.
KANGAS: OK, very good, understood. Now, let's get to those stock recommendations, ones to hold now and for the long term. What's your first pick and where does it trade?
KRAMER: Allied Irish bank. The ticker symbol is AIB and Allied Irish trades on the New York Stock Exchange. A phenomenal company where you can have a 7.5 percent dividend yield. I love Allied Irish. I've been following it. I'm look at buying and picking it up this week. Why do I love it? Because they own the Irish market. It's just them and another other player and the regulation makes it tough for anyone else to get in. And Allied Irish has never been a believer in no-doc mortgages and also in sub-prime mortgages, so they have a very clean balance sheet and a lot of upside and look at how the stock has come off significantly, the baby (INAUDIBLE) with the bath water.
KANGAS: OK, now your next selection is an infrastructure play. Tell me more about that one.
KRAMER: Chicago Bridge, CBI, This is also a company that has been around a long time, over 100 years, based in The Hague. Now Chicago Bridge is an infrastructure play. It's also called engineering and construction. Now many people see it erroneously as a company that makes bridges and repairs roads, but it's so much more than that. Its revenues are almost all driven by the oil and gas industry and they're a big player in liquid natural gas, LNG, which is growing phenomenally and could make up 20 percent of the national gas market by 2025. Chicago Bridge has a lot of upside left in it, back to $63 I would think.
KANGAS: We've got time for one more pick, Hilary, go ahead.
KRAMER: OK, Veolia Environment. Now this one I have talked about before. Upon, Veolia. The ticker symbol is VE and it trades on the New York Stock Exchange. There's a 3.5 percent dividend here. What I love about Veolia is it is a water company, waste management company and they have over 26 contracts in China to build water filtration projects and to manage the operations of the water for municipalities. Veolia is well positioned. It's your best way to play the global market, the demand in emerging markets and you can't go wrong. The stock has just been hurt so badly. It's down to $70 and it really should be back in the $95-$100 region.
KANGAS: Hilary, do you own any of these stocks mentioned tonight or have any disclosures to make?
KRAMER: I own Chicago Bridge, CBI and I also own Veolia, VE.
KANGAS: I want to thank you for being with us once again Hilary. It's been a pleasure.
KRAMER: Thank you, Paul, thank you for having me.
KANGAS: My guest, market strategist Hilary Kramer.
