• Car Wars
Jerry Flint, columnist: There are no new cars coming from Detroit. 2002 models look the same as 2001 -- virtually no change. This means incentives will get high. It also means that Ford, which has a lot of new things coming out, will take a larger market share.
Victoria Murphy, staff writer: Blockbuster Video (BBI) was in the doghouse three or four years ago. It's been run up 200% of its 52 week high. I still think it's a really great buy because they're getting a lot of their sales from DVDs. And their margins on their DVDs are higher than VHS.
Lisa Dicarlo, Forbes.com senior editor: But what about all the other ways people can watch DVD-quality movies, like satellite. After I got my satellite dish, I haven't walked into a Blockbuster in over a year.
Murphy: I still think that people are going to go to Blockbuster. I think the technology is far off.
• Microsoft XP
Scott Woolley, associate editor: Microsoft XP is scheduled to come out in late October. There's been talk that the government might try to delay or halt this. In the past, it's always been Silicon Valley on the government's side. This time chipmakers, like Intel, are depending on XP to save them from the PC industry which has been in the dumps. So it would be political suicide for Bush to end the entire industry with this court battle.
Dicarlo: In their latest earnings report, Michael Dell said they don't see any catalyst for growth until spring 2002. In his view, XP sales are not going to drive sales in the fourth quarter.
Dicarlo: I'm talking about Cendent (CD) which is poised to be the next powerhouse of online services. They're in the process of buying cheaptickets.com. They're up 95% from the start of the year but at $20 they're still cheap.
Murphy: I'd be weary. Everyone and their cousin wants to be a travel portal.
Dicarlo: Well, they own real estate, they own Avis rent-a-car, and many chains of hotels.
Woolley: They are cheap in a P/E basis. But their earnings have been up and down all over the map. Is this stock you can really value?
Dicarlo: In terms of the Galileo acquisition which should close very shortly, that's going to add $0.10 to $0.14 to earnings in 2002.
Makers and Breakers
• Motorola (MOT)
Peter Cardillo, Westfalia Investments: Maker
You haven't heard anyone say good things about this stock and that's precisely why I like it. Management has done a good job in trying to clean up the situation. When the tech group comes back, they could really be a good leader again.
Jim Clash: Breaker
It's run up 70% since April which is amazing but that's one of the reasons I wouldn't be buying it now. They're no. 2 in wireless headsets the problem there is the whole industry there is stalled. The other problem is 17% of its revenues come from chips and that's another business that's in the dumper.
Matt Schifrin: Maker
I think this stock has gone down far enough. I think the breakup value on this company is about $30. They're some good assets there. I think this a good stock to have.
• Sovereign Bancorp (SOV)
I like this stock because it's been on an acquisition bid for the past 5-10 years. They made some accounting changes that could add close to $30 million.
I don't like the stock. I came on a few months ago and said I don't like the stock. It was at 11 then. It's at 11 now. I think it's fully valued.
I was also on that show a few months and I was a maker and still am. It's a strong bank and after that show it ran up about 20%. Since then, it's dropped back 20%.
• Pepsico (PEP)
Pepsico's marriage with Quaker Oats will offer them a lot of opportunities. They've got close to $4 billion in capital to work with. This is a safe haven for someone looking to invest for the long term.
The hottest thing right now are these non-fizzy drinks and Pepsi is the king. They're the king in snacks as well.
David Asman, host: We should mention Frito-Lays has a bigger operation in Pepsico than Pepsi--the soda.
Schifrin: It's huge. They are the leaders in the business.
They get the Gatorade line from Quaker. That's a big business. This stock is also priced right at 29 times earnings. Look at Coke at 36.