Charles Payne: The Penn West Energy/Petro Fund merger (its really a take over) is the perfect move at the perfect time. The combined companies will be the largest energy trust in North America with an enterprise value of $11.0 billion. They will control 135,000 barrels of oil equivalent per day with 52% in liquids and 48% in natural gas. This stock is a buy/hold.
Question: Gee whiz. Do you think that there's a connection between the drop in housing permits and the decrease in the purchase of durable goods and the fact that Ben and the Boys have been raising interest rates? Do you think that the coming recession can be called anything but Bernanke's Bust? — Mark
Charles Payne: Mark, you're on to something and even though I've been vocal about my concern about the Fed (under the current and previous chairman). I hope Bernanke is right. Right now it doesn't look like the economy will topple but there are more signs of slowing than signs of legitimate inflation. Wall Street could handle one more hike and that has to come with a caveat or two. Otherwise, it will be Bernanke's:
• Blind Ambition
Take your pick.
Question: I have been a long time holder of Entremed, a small biotech. They seem to have something going at times, but the stock doesn't react. What is the outlook for this stock and what should I do, hold or sell? — Al (New Hampshire)
Charles Payne: Entremed used to be a hot stock, but the landscape is littered with former biotech and would-be drug companies that failed. The company has a potential drug, Panzem, that's in phase II trials for cancer and pre-clinical trials for rheumatoid arthritis. That means its going to be a long time before there will be any cash flow or profits. The good news is the company has strong working capital that would cover another 10 quarters of operating losses, but investors have given up. Al, at this point this is a high-risk play and I would actually rather chase it then let it fall lower.
Question: Heard Goldcorp (GG) was good, was climbing steadily until the resent market drop. Is all the Gold hype I hear real and what of this stock? — Matthew
Charles Payne: Goldcorp is a solid gold play and while there is an element of hype to the gold story (isn't there always an element of hype when an asset class takes off?) there are changing dynamics in gold. Stronger demand from countries with booming economies and as a financial hedge in an environment where central bankers are deliberately slowing growth changes the backdrop. For years only folks that bought into a doomsday scenario loaded up on gold but these days it's a good investment for anyone's portfolio and this is a good stock. A move through $30.00 should trigger more buying and could lift the shares to $38.00 within a year.
Question: What do you think of JetBlue (.O)? They are rapidly expanding their routes, despite recent hardship in the airline industry. I flew witht hem recently and I must say, I actually enjoyed my flight. Should I invest? — Christine
Charles Payne: I like JetBlue, too, Christine. But the company has suffered through growing pains and lost some of that magic. Business is booming, however, and it's beginning to be reflected in the share price. Occasionally the stock could hit an air pocket (pun intended) from higher fuel costs but I think they're back on track.
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).