Hot Stocks On Louis Rukeyser's Wall Street
Monday April 14, 8:15 am ET
(This was originally published Sunday.)
The following companies were mentioned during the Friday, April 11, airing of "Louis Rukeyser's Wall Street" on
CNBC:
AutoZone , Capital One Financial Corp. (NYSE:COF - News) , Southwest Airlines Co. (NYSE:LUV - News)
Many mutual funds aren't guided by tax
ramifications, but it's an important issue,
particularly when investment returns are so
slim, said Kevin Divney, manager of the Putnam
Tax Smart Equity Fund.
Divney said he likes auto retailer AutoZone
because it is well run and it has grown, pushing
out smaller competitors, during a tough time. As
for Capital One Financial, the company's
credit-card portfolio is one of the most
financially solid in the industry, he said.
Divney said he has recently sold shares in
airlines, including Southwest Airlines. That
company "probably is the better house in a bad
neighborhood, but sometimes we just don't want
to go into the neighborhood."
Fluor Corp. (NYSE:FLR - News) , Halliburton Co. (NYSE:HAL - News)
Fluor and Halliburton -- among other construction and oil firms -- may benefit from the reconstruction of Iraq
following the war, said Tom Gallagher, a political analyst with ISI Group.
As for President George W. Bush's plan to eliminate dividend taxes, Gallagher believes Congress will ultimately
give at least partial approval. "I think the president will get something big enough to get some meaningful dividend
tax relief," he said. Lawmakers, however, have indicated they won't back the Bush plan's full size.
Gallagher thinks something approaching $550 billion in tax cuts will be approved, which the analyst believes will
permit at least a 50% exclusion on dividend taxation. That will have "a meaningful affect on the stock market," and
may boost the Standard & Poor's 500-stock index by about 3.5%, he said.
Alliant Techsystems Inc. (NYSE:ATK - News) , Avery Dennison Corp. (NYSE:AVY - News) , Gillette Co.
(NYSE:G - News)
Corporate profits are much weaker than people assume, and the risk that the U.S. economy will fall back into
recession is similarly unappreciated, said Richard Bernstein, Merrill Lynch & Co.'s chief U.S. strategist. "We're
very worried about corporate profits," he said.
Inflation has increased "pretty strongly" on commodities, but much of that cost hasn't been passed on to
consumers, he said. This, he believes, indicates that companies sitting in the middle -- who deal in the commodities
other companies prepare -- are seeing their profits squeezed. That may cause layoffs, which ultimately harm
consumers, he added.
Bernstein recommended Alliant Techsystems, which, as a munitions supplier, he believes stands to benefit as the
U.S. military restocks following the war. He also touted Avery Dennison and Gillette.
Citigroup Inc. (NYSE:C - News) , WellPoint Health Networks Inc. (NYSE:WLP - News)
Equities aren't yet in a bull market, said Frank Cappiello, president of McCullough, Andrews & Cappiello. "There
are too many problems out there. Consumers are still constrained," he said. For instance, severe acute respiratory
syndrome, or SARS, may hurt global trade, he said.
Cappiello said he likes Citigroup because of its "excellent" balance sheet and WellPoint Health Networks because
it operates within a fast-growing sector and because he thinks the firm's earnings growth is sustainable. |
