Recap of Sat., November 24

Our panelists give you the scoop on all the inside business information before you hear it anywhere else in The Informer segment:

Leigh Gallagher, staff writer:  Exxon Mobil (XOM) is somewhat of a contrarian mover now because the oil prices are down right now.  They fell after September 11th and they fell last week after OPEC and Russia failed to come to an agreement. 

David Asman:  So why are you for it?

Leigh Gallagher:  This is a great opportunity at $38 to buy one of the largest and most profitable companies there is.  Also, Exxon is the least exposed to crude prices among the oil companies. 

Bruce Upbin, senior editor:  Yes, but there's also less fuel being used.  What about all those cuts in flights?

Leigh Gallagher:  That's actually better for the airline industry than Exxon but it's only 10%.

David Asman:  Scott, what have you got?

Scott Woolley, associate editor:  People are trying to hedge themselves into stocks.  People are investing in security stocks like Kroll (KROL) up 120% since September 11th.  But they're only increasing their workforce less than 10%.  So the numbers just aren't adding up.  This is a lifeboat that too many people are trying to get into.

David Asman:  So is there any security stock that you like?

Scott Woolley:  No, actually Exxon is the best play.

David Asman:  Okay Bruce, what have you got?

Bruce Upbin:  I have four words...Harry Potter, Monters, Inc., XBOX and Playstation.  It's all about fun and the return to the home.  The stock to watch is Toys R Us (TOY).

David Asman:  But I hear Wal-Mart sells more toys now than Toys R Us.

Bob Lenzner, national editor:  And who wants to invest in a company where the whole thing is three weeks before Christmas?

David Asman:  What happens if it's a lousy Christmas?

Bruce Upbin:  I don't think it's going to be.  The new stores after taxed, get more money than the old stores.

Bob Lenzner, national editor:  The venture capital story of the decade is BEA Systems (BEA).  This company puts large corporations on the internet.  It's been growing at 40%.  It went from 80 down to 8.  Now it's at 16. 

David Asman:  But why should it grow when everything else is contracting?

Bob Lenzner:  Because it has 35% of this market of putting companies in.

Leigh Gallagher:  I disagree.  Oracle is getting into this business big time and that would scare me.

Bob Lenzner:  They have IBM against them too.

Scott Woolley:  I'm concerned about how real the earnings are for this company.

Makers & Breakers

Pharmaceutical Resources (PRX)

Jordan Kimmel, Magnet Management:  Pharmaceutical Resources (PRX) is a prototype for what I look for in a stock.  I'm a very disciplined investor.  I'm looking for topline revenue growth and I'm looking to buy that growth at a discount.  This is a generic company.  They have about 50 products in their market.  And no one product represents more than 5-10% of their pipeline. 

Matt Schifrin, senior editor:  BREAKER 
I think investors who like this stock may be taking a little too much prozac.  This stock has gone from $6 to $33.  I think it's too overpriced and has outrun its track.

Jim Michaels, editorial vice president:  BREAKER
I wish you guys would tell us more about these stocks when they're at 10, not 3 times higher. 

Jordan Kimmel:  Well, the stock had a little run and now has gone sideways for about 4 months now.  The stock is trading at 20 times earnings.  You guys don't like to get stocks on the run, I do.

Genesis Microchip (GNSS)

Jordan Kimmel:  Genesis Microchip (GNSS) is a technology company which pumps images into flat panel screens.  This company has topline revenue growth.

Jim Michaels: BREAKER
The flat screens may be in now, but they're anywhere from $3,000 to $10,000.   This chip business is very competitive.  I think it's an overpriced stock.

Matt Schifrin: MAKER
I disagree.  Businesses are converting their old screens to LCD screens.  The 15 inch screens only cost $300.

David Asman:  As the price of these screens go down, this is the stock to buy?

Matt Schifrin:  Yes.