"Street Critique"-Pat O'Hare, Chief Market Analyst at briefing.com
Wednesday, May 20, 2009DARREN GERSH: Tonight's "Street Critique" guest has been bargain hunting in the supermarket aisle. He's Pat O'Hare, chief market analyst at briefing.com. Welcome back to NBR Patrick.
PATRICK O'HARE, CHIEF MARKET ANALYST, BRIEFING.COM: Thanks for having me on the program again.
GERSH: All right, so explain this. I understand you're finding some comfort in jam and jelly. What's that about?
O'HARE: Sure. Well the market has had a great run obviously since early March and some stocks have not quite participated as fully and JM Smucker, the stock symbol SJM, is one of them and partly because it fits into a defensive orientation, consumer staples group. But we think right now that because it's been flying under the radar, that's a real nice investment opportunity for the long term investor, trades at about a 40 percent discount to its 10-year historical P/E multiple. And also the company recently increased its dividend by 9 percent which is in contrast to a lot of companies that have been cutting their dividends lately.
GERSH: Now, do you own this stock. Do you have some disclosure here?
O'HARE: No, I don't own it right now.
GERSH: Explain who should own it and for how long. Is this for somebody like a kid whose got 20, 30 years to own it or for someone who is retired?
O'HARE: I think either could fit that bill. It's really for someone when you think about risk tolerance someone who is a little bit lower risk tolerance and is more conservative in their investment orientation. But, you know, it also derived 75 percent of its sales from products that are number one in their respective categories. It's time tested. It's been around since 1897 and so I think it's just really in a good spot right now.
GERSH: What's it say about the consumers and where the economy is, if you're basically picking a stock where the big splurge is going to be fancy jam?
O'HARE: Well it kind of fits with our premise that the market's getting a little bit carried away now with the recovery train idea because part of that recovery train has been predicated on the belief that the consumer's going to come back in robust fashion and we just don't think that's going to be the case. The consumer is facing rising unemployment still, decelerating income growth, depressed asset prices and high debt burdens that they're still trying to service in a difficult environment.
GERSH: That makes me wonder, banks have been getting a lot of attention lately. So it sounds like you don't think that this bank rally is for real.
O'HARE: Well you know when you're coming back from the worst case scenario, the bank rally is for real. It's been nice to see but again we think we're now getting to the point we're getting carried away here so we wouldn't look for a full extension or a meaningful (INAUDIBLE) on those bank stocks in the near term.
GERSH: That's great, Pat. Thank you very much for being with us. Pat O'Hare, chief market analyst at briefing.com.
