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Recap of Saturday, March 16:South African Breweries; Unisys

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

David Asman: Bruce, the merger between Hewlett-Packard (HWP) and Compaq (CPQ), is it going to happen?

Bruce Upbin, senior editor: Earlier in the week I thought this was a toss-up, but now I think the momentum is going to move toward the nay-sayers. Before the merger was announced the stock was trading at around thirty. Usually the acquired company's stock is supposed to go up but that's not happening here.

Quentin Hardy, senior editor: I think Bruce has pinpointed the problem here. A lot of people are thinking this stock will bounce right back up, which means a lot of short-term hot money.

David Asman: Okay, Bob, homes are still going up so what does that mean for the stocks?

Bob Lenzner, national editor: Home stocks are really cheap. They're all selling at nine times earnings. Some stocks to look for are Lennar Corp (LEN), Toll Brothers (TOL), and WCI Communities (WCI). WCI's sales of homes are going to be up 40% this year.

David Asman: What happens if you buy these stocks and the housing market crashes?

Bob Lenzner, national editor: There's so many people with money to buy homes and interest rates are also very low. I don't think that's going to happen.

Victoria Murphy, senior reporter: Robert Toll actually made an announcement saying no one gets our stock. We have 8% new orders. That's great.

David Asman: Okay, Victoria. What have you got?

Victoria Murphy, senior reporter: American Eagle Outfitters (AEOS) are sort of the knock-off of Abercrombie and Fitch (ANF). And right now, American Eagle Outfitters are outdoing Abercrombie and Fitch. Their spring line is selling really well and I think they're going to see an increase in sales.

Quentin Hardy: Don't you worry though that they'll lose margin and be forced to discount eventually?

Victoria Murphy: No, I think they have their hands on the teenage pulse and they know what sells.

David Asman: Okay Quentin, we move on to you. You've got info on Baxter's right?

Quentin Hardy, senior editor: Yes, Baxter's (BAX) is a hospital supply company, now they're going into higher valued pharmaceuticals. Their first drug, which helps hemophiliacs has done really well. It's $750 million in sales last year, $1.3 billion this year.

Bob Lenzner, national editor: I was amazed that they made so much money off of this drug that was helping hemophiliacs.

Bruce Upbin: If they stick to the blood drugs they should do well. But if they start straying towards drugs to treat brain disease and areas they don't know they might get into trouble.

Makers and Breakers

South African Breweries (SBWUY)

Ron Liebis, The September Group: They're a brewery and beverage company. The bottlers are Coca-Cola. It's the cheapest way to get into the fastest growing beer drinking and beverage drinking market. This is where the growth is coming in the beer industry.

Bruce Upbin, senior editor: MAKER
I like this company. As soon as they stop spending so much money on breweries, you'll really see some of that cash go to the bottom line.

Bill Baldwin, editor: BREAKER
This company is very big in the Canary Islands and Poland. But will I put my money into places like that? I need to see a really cheap P. E. to invest in this stock.

Unisys (UIS)

Ron Liebis, The September Group: They are a software consulting company and they also have the remnants of their old hardware business. I think Unisys is worth more as a consulting company as a boxed manufacturer, such as Hewlett-Packard or Dell.

Bill Baldwin, editor: MAKER
This company was first in commercial computing and got upstaged by IBM 50 years ago. I see it as a resurrection play.

Bruce Upbin, senior editor: BREAKER
A great tech company is a great tech brand and Unisys is increasingly marginalized with the EDS's and the IBM's and the Dell's of the world. I don't think this is a good company to buy.