Hot Stocks On Louis Rukeyser's Wall Street
Sunday December 8, 10:33 pm ET
Dow Jones Business News
NEW YORK -(Dow Jones)- The following companies were mentioned during the Dec. 6 airing of "Louis Rukeyser's Wall Street."
Pfizer Inc. (NYSE:PFE - News) , eBay Inc. (NasdaqNM:EBAY - News)
Stock investments will probably return 6% to 8% over the next five to seven years, said Hank Herrmann, chief investment officer at Waddell & Reed Financial.
Stock picking has become quite risky with less reward, he argued. "It's become more of a loser's game than a winner's game," Herrmann said. "If you stick your neck out and you're wrong, you really get punished. If you get it right, you get a modest reward."
Herrmann likes drug producer Pfizer and eBay, the online auctioneer that "has the distribution concept of Wal-Mart and profitability of Microsoft," he said.
The resignations Friday of U.S. Treasury Secretary Paul O'Neill and White House economic adviser Lawrence Lindsey should help the markets, Herrmann said. In particular, O'Neill was upsetting to the markets because "he had a terrible penchant for saying the right thing at the wrong time," Herrmann said.
Accounting is long on rules, but gives management too much latitude. The Securities and Exchange Commission must give the profession "more backbone," Herrmann said.
Corporate managers have generally allocated capital poorly, he said. Should the Bush administration succeed in eliminating the double taxation of dividends, it might encourage managers to pay out more excess cash to shareholders, giving owners the chance to better invest the funds, Herrmann argued.
Viacom Inc. , Fox Entertainment Group Inc. (NYSE:FOX - News) , Oracle Corp. , Cisco Systems Inc. (NasdaqNM:CSCO - News)
By U.S. Federal Reserve Chairman Alan Greenspan's method for evaluating the stock market's worth, stocks in general are "well over" 30% undervalued, argued Gretchen Lash, chief investment officer at Roger Engemann & Associates. The threat of war with Iraq will force a certain discount to persist, but current prices are far too low, she said.
Media companies are attractive because advertising spending picked up ahead of the November elections and has stayed strong since, Lash said. In that industry, she likes Viacom and Fox Entertainment. Among technology-focused firms, Lash likes Cisco and Oracle, which she believes will gain as the economy recovers.
Adobe Systems Inc. (NasdaqNM:ADBE - News) , Citrix Systems Inc. (NasdaqNM:CTXS - News) , Cognos Inc.
In general, corporate profitability isn't yet rock solid, said Lou Holland, chief investment officer of Holland Capital Management, but he expects profits will improve next year. Even though the stock-market indexes will need time to " digest" the rally since early October, "people should get on board" and buy stocks, he advised.
[Harry: Didn't he get arrested for insider trading. What is he doing still working in the industry!???!?]
Holland favors health-care, financial-services and technology companies because he reckons these industries will grow faster than others. He recommended shares of Adobe, Citrix and Cognos.
T. Rowe Price Group Inc. (NasdaqNM:TROW - News) , Dollar Tree Stores Inc. (NasdaqNM:DLTR - News)
The stock market was as bad as it'll get in early October, and stocks should do "reasonably well" next year, said Beth Dater, a portfolio manager with Credit Suisse Asset Management. Dater believes corporate capital spending will pick up next year. Also, the economy seems to have turned positive. Nonetheless, Dater said new tax breaks are needed to stimulate corporate spending and improve consumer confidence.
She recommended T. Rowe Price and Dollar Tree shares.
-Nick Baker, Dow Jones Newswires; 201-938-4047; nick.baker@dowjones.com |
