Our panelists give you the scoop on all the inside business information before you hear it anywhere else in The Informer segment:
David Asman: Victoria, Nasdaq's up, but there's one stock you say to avoid. What is it?
Victoria Murphy, Senior Reporter: Yeah, BEA Systems (BEAS). They make application server software, and they're kind of a Wall Street darling right now. I don't buy it, nor would I buy this stock. Their products are kind of getting commoditized, and they're facing stiff competition from IBM (IBM), Oracle (ORCL) and also an open-source version called JBoss that is gaining a lot of traction. I wouldn't touch it.
David Asman: Mike, a false profit stock?
Mike Ozanian, Senior Editor: And they've got another big problem, David. They have a $273 million tax liability on their balance sheet. This represents a future obligation to Uncle Sam. When Wall Street gets a hold of that, the stock's going to be in trouble.
David Asman: Well Bruce has, what could be, a good buy in tech. Tell us about it.
Bruce Upbin, Senior Editor: CDW Corp. (CDWC). They sell printers, PCs, and software. They're like Dell (DELL) except they sell other stuff, besides Dell stuff, to small and medium sized businesses which are desperately needing help in technology. They don't have those big staffs to help them. The sales are doing OK. They're picking up a lot of government business, but it's not falling off like other people's. The stock is cheap, compared to your other companies like Dell, Yahoo! (YHOO) and eBay (EBAY).
David Asman: Victoria, CDW. You're out in tech valley, what do you think?
Victoria Murphy: I agree with Bruce. The thing that I like about CDW is that the company has room to grow. Their sales and distribution centers can take on twice the current capacity without a lot of added costs. So they're likely to see a nice increase in earnings once revenues kick up.
Mike Ozanian: I have a feeling that they may have missed one of their recent earnings targets, and I think that's going to happen again. What they've been doing, to make their numbers look a little better, is they've been slashing their marketing expenses, and pushing more of the costs onto their venders. I think that's going to come back to haunt them.
David Asman: Mike, that's two in favor of CDW, now Schering-Plough (SGP). Do you like them?
Mike Ozanian: I do. It's been a dog of a drug company for a while. The stock is 60 percent off its high of two years ago, but it's coming out with a new cholesterol drug, which it made alongside with Merck (MRK), and I think it has great potential.
David Asman: But it lost Claritin, right?
Mike Ozanian: It came off patent, it lost that to generics, but I think this ZETIA is going to make a long earnings recovery.
Bruce Upbin: With Schering-Plough, you'd rather buy the Merck than the Schering-Plough. You want a big pipeline with lots of drugs coming out, and Schering-Plough doesn't have it.
Mike Ozanian: I think sometimes it's better to have a company that's not quite as good if it's at a big discount, and that's what I like about Schering-Plough.
Makers & Breakers
George Muzea, President of Muzea Insider Consulting Services: MAKER
I like it because insiders, basically, have been on the sell side, and, all of a sudden, abruptly, three insiders came in and bought the stock at current levels. And one of those buyers was a CFO, who increased his holdings by 25 percent