Our panelists give you the scoop on all the inside business information before you hear it anywhere else in The Informer segment:
David Asman: Bob, let's start with you.
Bob Lenzner, national editor: Some of my rich friends are buying Russia: The Templeton Russia Fund (TRF) that is. If you've got special connections there you can buy the secondary stocks, which are selling for very low. It's up 82% this year.
Bruce Upbin, senior editor: Gimme a break! Russia is still a basket-case.
Bob Lenzner: There are problems like the population declining due to too much illness from Tuberculosis and AIDS. And that'll have serious effects on the economy but the stocks are cheap.
David Asman: Okay, Elizabeth you've got something on buying countries in general.
Elizabeth MacDonald, senior editor: I would say to Bob, yeah buy Russia but be careful because they lack corporate governance. I know that's a problem here in the U.S. but foreign countries have really lousy accounting practices.
David Asman: Bob, if you sign a contract in Russia they can just tear up that paper and all bets are off right?
Bob Lenzner: If you buy the Templeton Russia Fund you're all right.
David Asman: But how do they guarantee that?
Bob Lenzner: I'm not sure how they guarantee that.
Elizabeth MacDonald: The thing is there's very little in the way of enforcement when it comes to foreign based companies.
Bob Lenzner: The big household European names fiddle with their numbers very badly and you can't trust them.
David Asman: Okay Bruce, what have you got for us?
Bruce Upbin, senior editor: Forbes' company of the year this year is Harley-Davidson (HDI). They have a pristine balance sheet, strong management and a fanatic consumer base. It's their 100th anniversary and their sales are up 15%, earnings up 26%.
David Asman: But how is the stock doing?
Bruce Upbin: It's not cheap. Great companies are never cheap. It's a great stock to trade. Goldman Sachs says buy under 40, sell it over 50.
Elizabeth MacDonald: This company has a really good consumer base. Where else can you charge for an automobile or a motorcycle. The only problem is their consumer base is aging and you're not going to see grandma riding down on a Harley.
Makers and Breakers
Rob Black, GLB Group: MAKER
Bank of America (BAC) has a 3.8% dividend yield. It's looking at twelve times next year's earnings. 2002 is a growth and income year and Bank of America is well positioned.
Matt Schifrin: BREAKER
Interest rates are rising, weak economy, deteriorating credit. The stock is up 50%. This is not a stock you want to have.
Jim Michaels: MAKER
I would buy the stock. It's at 4% cash yield. It's cheap compared with other bank stocks.
Rob Black: They're buying back 8% of their own shares using their own cash. That's a strong company in my opinion.
David Asman: Okay Rob, what's your next pick?
Rob Black: MAKER
Cisco Systems (CSCO) is like Crisco, they're cooking their competition. They're stable. They're in a number one position.
David Asman: How's the price of the stock?
Rob Black: In 3-5 years you can beat the market.
Jim Michaels: BREAKER
That's my favorite short sale. If I could make a short sale I would sell Cisco short. That stock has been sliced so thin. Seven and a half billion shares outstanding. They can earn $3 billion dollars and it's only 40 cents a share.
Matt Schifrin: BREAKER
I agree. This stock is at 80 times earnings. The management doesn't walk on water anymore. Their game was buying companies with their inflated stock. That growth game doesn't work anymore.
David Asman: Final word Rob?
Rob Black: They're wrong. Cisco is a grill in their market and they couldn't be more wrong.