"Street Critique"-Hilary Kramer, Chief Market Strategist at Greentech Research
Wednesday, July 23, 2008PAUL KANGAS: Tonight's "Street Critique" guest has brought our viewers lots of stock picks, so tonight we thought we'd review her picks from the second quarter. She's Hilary Kramer, chief market strategist at Greentech Research and author of "Ahead of the Curve." And Hilary, good to see you.
HILARY KRAMER, CHIEF MARKET STRATEGIST, GREENTECH RESEARCH: Nice to see you, Paul.
KANGAS: It has been a rough time in the markets with the Dow down about 1,000 points from where it was on your April 16 visit. The theme from the visit that time was stocks that had been around for a century that still have upside potential. Now you liked Goldman Sachs and Allied Irish Banks. Goldman is up 11 percent. Allied down 34 percent. Do you still own them and like them?
KRAMER: I like both of these stocks. I own both of these companies and believe that there is significant upside. They were hurt with the rest of the financial institutions. You buy best of breed you end up with best of price down the road.
KANGAS: Now, you also liked Chicago Bridge and Iron and Veolia Environment at that time. Both are off 23 percent. Would you still be a buyer here or do you still own them?
KRAMER: Absolutely. Both Chicago Bridge and Veolia, they have been victims of the inflationary pressures globally. That's why the stocks have dropped because they have incurred more expenses than they expected, just like us as consumers are struggling under a very costly consumer environment.
KANGAS: On May 7, you liked the scrap metal and recycling stocks. Metalico is up about five percent. You thought it could go to $20 and Sims Group you saw heading to $40. It's off about eight percent. Are you still with these and do you own them?
KRAMER: Absolutely. I'm with both of them. Metalico did go up all the way to $18 by early July, and Sims Group also hit $41. It went above $40. They did trade back down. I own them, and I've been buying more as they came back down.
KANGAS: Now, you also liked Industrial Services of America. It had a nice gain, up almost 21 percent, and Schnitzer Steel, you saw it going to $110. It hit $114 on June 30 but it's off nine percent from that May recommendation. Did you take in money off the table there?
KRAMER: I took money off the table, but I still own them as core positions because that's the way I invest. It's not necessarily a buy and hold long- term market with certain kinds of companies that are commodity related, but both of these, especially IDSA, they have both done very well in the interim and then they came back down.
KANGAS: On May 21, it was overseas opportunities with the Brazilian miner Rio and Chicago Bridge and Iron again. Both have taken a hilt with the market downturn. And you also liked Petrobras and Aluminum Corp. of China and they're down as well. What are you doing with those?
KRAMER: These are all buys now. The ones that I own, again, are the Rio, Chicago Bridge, the PBR, the Petrobras, that I own personally. That is for the long term. I take a 20 to 30-year approach on that one because it's really tie to the price of oil, rather than the previous picks which are more trades because of their kind of quick pop and drop. I would stick with all of these. I think Rio, especially, is going to come back. And you know how I feel about Chicago Bridge and the infrastructure play.
KANGAS: OK. Now in June we talked alternative energy plays and you had a big winner with EnerNOC, up 69 percent since that recommendation. SunPower is up three percent. Are you still with these?
KRAMER: Yes. I am with all of them, EnerNOC I started to take money off the table today as a matter of fact and rotated it into Converge, COMV, its sister company. Its colleague in the space.
KANGAS: Now MEMC Electronics and the PowerShares WilderHill Clean Energy both took a hit. You did say at the time the solar plays are very volatile and not for everyone. Are you still a believer in them long term? We're down to only 40 seconds, incidentally.
KRAMER: OK. MEMC wafer, as a matter of fact, it's down 25 percent after- market right now. That's volatility. I do believe long term in wind and solar but really it is not for everyone. And this is just for money that you can afford to lose.
KANGAS: Of course, on your most recent visit with the market in a major selloff, you said cash is king. We've seen the markets come back a bit here. Do you think it's a bull trap?
KRAMER: No, this is just a trick. This is just a trick to get everyone back in the market so then you can lose more money. We have not hit the bottom yet. We may have another five to 10 trading days upwards, Paul, but look for a bottom in October and November.
KANGAS: I want to thank you for being with us once again.
KRAMER: Thank you, Paul. Thanks for having me.
KANGAS: My guest, Hilary Kramer of Greentech Research.
