Our panelists give you the scoop on all the inside business information before you hear it anywhere else in The Informer segment:
Elizabeth MacDonald, senior editor: Last fall we said don't buy Bayer (BAY). It was trading at $36. Back then anthrax fever had hit Wall Street. Net income is nearly half as of 2001. The stock is now at $32. The problem is that Cipro's patent ends in 2003. There's a lot of competition from generics and there's also a lot of lawsuits over deaths related to these drugs.
Bruce Upbin, senior editor: Cipro, if you back out the emergency order that the government made, actually declined. To have a patented drug actually decline is very rare.
Elizabeth MacDonald: I wouldn't buy this stock now but it may be a buy in a couple of months when these problems subside.
David Asman: Okay, Chana. You've got a good buy right?
Chana Schoenberger, staff writer: Target (TGT) is a big retailer that used to compete with Wal-Mart and used to compete with Kmart, when Kmart was still around. Target is doing something with the Visa Smart Card. With these smart chips you can actually download personalized coupons from your home. What this means for Target is that they'll be able to track their customer's purchases more closely and work promotions to get more sales.
Bruce Upbin: Smart cards have never taken off in the U.S. because smart cards are so prevalent. They might have worked in Europe but not in the U.S.
Chana Schoenberger: This is specifically smart cards for personalization. It's a slightly different use than in Europe. In Europe they use them because the telecom system isn't as good.
David Asman: Okay, Luisa. Let's talk about Costco (COST).
Luisa Kroll, associate editor: I have to confess I am huge customer of Costco. They have everything and you can buy it in bulk. It's also a good time to look at their stock. For a couple of years earnings were decelerating and there were some problems there. But now those earnings are looking like they'll accelerate. Some are saying earnings will increase 15 to 20%.
Elizabeth MacDonald: Costco is expanding into the Midwest and into China. I think that's great idea for this company.
David Asman: Okay, Bruce. Scholastic, I remember those booklets when I was in school. You think they're a good company?
Bruce Upbin: Scholastic (SCHL) is one of the largest publishers of children's book and of course has the Harry Potter franchise. Now the author is supposedly late with her next edition. Most people thought another Harry Potter would be out by this summer. Turns out that it might not be out till next summer and this has driven down the price of Scholastic's stock.
Luisa Kroll: I think another point to make is Scholastic has 5,000 titles and they have success in leveraging old brands.
Chana Schoenberger: What about the old Harry Potters? Aren't people buying those?
Bruce Upbin: Sure. Whenever the DVD comes out of Harry Potter, it sells more books.
Makers & Breakers
Newmont Mining (NEM)
Guenther Mathis, Quadriga Fund Management: MAKER
Newmont Mining is obviously a gold play for us. We see major trends in the gold market. Right now it's at $325 and we still see it growing stronger.
Elizabeth MacDonald: MAKER
Newmont is the world's leading producer. I like this stock very much. It's a flight to safety issue here. Gold broke the $400 benchmark in 1980 when Iraq invaded Kuwait. Miners are cutting the amount of gold they sell in fixed prices. That's going to put upward pressure on this stock.
Mike Ozanian, Senior Editor: BREAKER
This company is among the highest cost producers of all the gold companies. Some $184 just to get a single ounce out of the ground. That's before all the other expenses that get shelled out.
Cox Communications (COX)
Guenther Mathis, Quadriga Fund Management: MAKER
Cox Communications is in a very interesting sector. We like this sector a lot. We believe the market is out for poison so it goes up.
Mike Ozanian: MAKER
This company generates $125 in net cash flow per subscriber. Cox Communications has been kicked in the gut but I'm a maker. This company is in Las Vegas and San Diego, two of the best metro areas in the world. I think it's a right takeover target.
Elizabeth MacDonald: BREAKER
Its debt to equity ratio is at 6 percent. Also, it's very rich at 105. That's their P.E. I'm not sure if it's a good takeover target. They have Cox Enterprises as a majority owner at 76 percent. It may be hard to convince them. They've been looking to acquire instead.
Guenther Mathis, Quadriga Fund Management: I don't think they're a takeover target at all. I think they will improve with the market.
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