Charles Payne: Hello, Leslie. I think copper will have another move higher, although we can't expect a rally in the next 12 months that we've enjoyed in the last 12 months. That said, Southern Copper is a very good company, and the shares have come off nicely. In fact, the stock has made the kind of pullback we find very appealing. While we like the fundamentals, let the chart be your guide. We'd buy stock here with a stop-loss at $77, as a failure to hold there could send the stock swooning harder and faster. On the upside, the stock has initial room to $91.00 then back to $105, where we'd reevaluate the situation.
Question: What is your prediction for the near term on Marvel Tech Group (MRVL) and Broadcom Corps (BRCM)? — Dr. U
Charles Payne: Talk about having to pick your favorite child! Broadcom is down 31 percent from the recent high and Marvel is down 33 percent. Broadcom has a PE ratio of 42 and Marvel has a PE of 46. In the most recent quarter, Broadcom saw sales increase 53 percent, while MRVL experienced a 43 percent jump. I would go with Broadcom, I think both stocks are going to make similar numeric moves, like up $1.50 one day and up $2.65 another day. Since Broadcom has a lower entry price, it may make the bigger percentage gain, which is what investing is all about. Both are very oversold.
Question: I would appreciate some feedback on expected share growth of General Electric (GE) stock in the next two to three years. I have heard that company performance to goals is excellent. Yet, GE stock price does not seem to follow the positive performance trend. Thanks, and I'll be watching for your response. — B.C.
Charles Payne: The Dow Jones industrial Average was created in 1896 (although an earlier version was created in 1884) and it contained 12 companies. All but one has either bitten the dust or is part of other companies, except one. Yes, you guessed it; GE has been bringing good things to life for some time. Unfortunately, the stock is stuck in the mud. This is the problem with lumbering giants that can generate cash but not the kind of growth that is rewarded by investors. Having said that, there is a safety factor that is important, too. The company lost some credibility because of how they achieved the bottom line in the past, and the new CEO hasn't garnered the infatuation of the Street like Jack Welch did. Nonetheless, the stock looks cheap in many ways and is a keeper. It isn't going to be the biggest winner in your portfolio but it should be a solid investment. Heck, it's proven itself after 122 years.
Question: My fiancée wants to get rid of $23,000 in credit card debt by declaring bankruptcy. She has the means to pay for it but does not want to because her ex is the one that created the debt (they had cosigned accounts). He declared bankruptcy, and he is now debt free. Is this smart, ethical, or legal? — Ian (Owings Mills, MD)
Charles Payne: I have to tell you Ian, Hell hath no fury like a woman scorned, but I wonder if this particular woman may end up scorching herself. While bankruptcy gives consumers legal protection from creditors, it also creates a very poor credit rating for seven years (after the judgment is ruled), sometimes even longer. When a person files, they must provide a schedule of assets and liabilities along with a statement of financial affairs. It sounds as though your girl may not even be eligible. If she could work out deals with creditors for small payment plans it would be a wise option, as the amount isn't Earth-shattering. You guys need to speak to a lawyer and perhaps a credit expert. In the meantime, be careful and treat this woman like gold, she's been dogged before and may be guarded.
Question: Of the Dow stocks, which do you think is the best buy currently? — Craig and Linda
Charles Payne: This is a tough one. There is a strategy that says you buy last year's worst performers, and it works more often than not. In this case, the drug stocks would look most appealing. General Motors (GM) and Coca Cola (KO), which have been beached whales, also look compelling, but I would go with Hewlitt Packard (HPQ). The company is on a roll, and I think the momentum will continue throughout the rest of the year.
Charles Payne is the founder and CEO of www.wstreet.com and appears regularly on FNC's Cost of Freedom Business Block.
Charles Payne is the host of Making Money with Charles Payne (weekdays 6-7 PM/ET).