"Street Critique" -Hilary Kramer, Chief Market Strategist at Greentech Research and Author of "Ahead of the Curve"
Wednesday, May 21, 2008PAUL KANGAS: Tonight's "Street Critique" guest likes growth stocks and right now she's seeing growth opportunities overseas. She's Hilary Kramer, chief market strategist at Greentech Research and author of "Ahead of the Curve." And Hilary, good to see you again.
HILARY KRAMER, CHIEF MARKET STRATEGIST, GREENTECH RESEARCH: Nice to see you, Paul. Thank you for having me.
KANGAS: Before we get into your international stock picks, let's talk about the U.S. market. The Dow off over 420 points in the last two sessions. Oil over $133 a barrel. What are you seeing here? KRAMER: The real problem is that companies across the board from chemical companies, transportation, specifically airlines, they're all starting to whisper lower guidance. They haven't done it officially, but this is translating into stocks being sold off because stocks are all based on growth. That's what creates value and upside in the stock price and therefore money in a shareholder's pocket.
KANGAS: OK. Fair enough. Now on to your selections. You like Companhia Vale Do Rio Doce (RIO) or something like that.
KRAMER: Very well done Paul.
KANGAS: I call it Rio.
KRAMER: I just call it Rio.
KANGAS: R-I-O on the big board. Tell me what they do and why you like it.
KRAMER: OK. Rio is a Brazilian company that produces iron ore, pellets, aluminum copper. They're one of the largest nickel producers in the world. Rio is the largest provider of iron ore to China. Iron ore is an ingredient in the making of steel. RIO -- I have a price target of $60 and some of the houses on the street including Goldman Sachs have a high $56 target in fact.
KANGAS: It's got a strong-looking chart. How about another selection?
KRAMER: OK, the same theme which is construction, growth, emerging markets. Chicago Bridge (CBI). I've talked about this stock before. I own Chicago Bridge. The ticker symbol is CBI. It's a Dutch company, not a Chicago-based company. The market here is inefficient because the stock is $43 because of misinterpretation of what they do. They are not just building bridges. They are not fixing roads. They are not building schools in poor municipalities across this country. They are absolutely winning because they are a supplier and a construction engineering company to oil and gas companies especially in the Middle East.
KANGAS: You look another Brazilian issue, Petrobras, PBR on the big board.
KRAMER: Yes. PRB is another company that I bought. I bought it a few months ago originally because Petrobras had a discovery that's the most important reserve discovery in the last 50 years in terms of supply. And Petrobras is buying up the oil rigs all over the country, leasing them out actually. I can see Petrobras, which is now $75, easily going to $100. I think it's a great way for anyone to play the rising price in oil and the demand in the emerging markets.
KANGAS: We just have 40 seconds left. Your final choice is a China play. Tell me quickly.
KRAMER: Aluminum Corporation of China, ACH is the ticker symbol here in the U.S. The stock is $44 right now. I believe that Aluminum Corporation of China will continue to grow because there's such demand for aluminum. It's the ingredient in everything from real estate to electronics and obviously being based in China, they have the market share and they have all the regulatory rulings on their side in terms of being able to supply and pricing power.
KANGAS: Hilary, do you own any of the stocks you've mentioned or have other disclosures?
KRAMER: Yes I own Chicago Bridge and I own Petrobras.
KANGAS: Very good. Great to see you once again.
KRAMER: Thank you, Paul.
KANGAS: My guest Hilary Kramer of Greentech Research.
