Our panelists give you the scoop on all the inside business information before you hear it anywhere else in The Informer segment:
David Asman: Chana, now these digital cameras (search) are paying off for a couple of companies. Which ones?
Chana Schoenberger, staff writer: Well, Dell (DELL) and Hewlett-Packard (HPQ) are the most obvious candidates here. Dell has announced, and I actually saw Michael Dell say this at a conference last weekend – he is a man that I would not want to bet against – they are coming out with a new line of consumer electronics.
David Asman: Based on all-new technology, new chips, et cetera.
Chana Schoenberger: Well, the idea is just that you’ll be able to buy it cheaper from Dell, just like you can buy everything cheaper from Dell.
Mike Ozanian: I like Dell; I don’t like H.P. The reason is that this is a commodity business, or rapidly turning into one, and that means that the advantage goes to the low-cost producer. That’s why I like Dell, and not H.P.
Chana Schoenberger: Actually, H.P. has interoperability between its PCs and its cameras, which means the camera docks right into the PC. For people who don’t know a lot about computers, that’s very compelling.
David Asman: OK, Mike. Something else that has become very popular, unfortunately, are hip and knee replacements. There’s a company that makes out from that?
Mike Ozanian: Zimmer Holdings (ZMH). They just bought Centerpulse which was Sweden’s company that made the same implants. They were the largest makers of implants in Europe. Zimmer bought them, they now usurped Johnson & Johnson (JNJ) as the largest maker of such products. The stock is probably going to go up to $70 within the next year.
Leigh Gallagher, staff writer: I think it’s a great company. We also recommended a similar company, Stryker (SYK), last July at $46 and it’s now above $70. I think there is truth in what Mike is saying.
David Asman: OK Leigh, let’s stay with you and talk about high oil prices. Is there a way to get rich off of that?
Leigh Gallagher: There is. ExxonMobil (XOM), the world’s largest oil company, is a steady stock for unsteady times.
David Asman: Now this is the perfect stock that we’ve been talking about. Why is it perfect?
Leigh Gallagher: It’s perfect because it’s got steady growth, consistent earnings, this is a company that makes money in a difficult environment, and it pays a dividend of 3 percent.
David Asman: Well Mike, there are a lot of other oil stocks out there, why Exxon and why not one of them?
Mike Ozanian: The reason why I like them is because oil is, what? $30 a barrel right now? The way the balance sheet is structured for Exxon, they can make money whether oil is $20 or $40 a barrel.
Leigh Gallagher: That’s true, and if oil prices rise, they can benefit more, and it trades on 14 times earnings.
Makers & Breakers
Sinclair Broadcast (SBGI)
Eric Green, senior portfolio manager at Penn Capital Management: MAKER