Forbes on FOX

Recap of Saturday, July 27:Viacom; Walt Disney Co.

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

Scott Woolley, associate editor: Baby Bells like Verizon (VZ), SBC Communications (SBC), and BellSouth (BLS) have been known as the cockroaches of telecom.

David Asman: What does that mean?

Scott Woolley: It means they're the only ones who've survived. There's devastation everywhere and here are companies that are actually making a profit. But they have some problems. All the cash they've been making they've had to plow into the business just to stay even.

Bruce Upbin, senior editor: When should I buy? These dividend yields look pretty good.

Scott Woolley: They are but I think that's the danger. You look at the dividend yields and say I'm making what I make on treasury bills but if the core business is going to decline like AT&T did, it's not safe.

David Asman: Okay, Bruce. Hewlett-Packard merged with Compaq. How are they doing?

Bruce Upbin, senior editor: The stock market has driven their price so far down that it's starting to look really, really cheap. It's gone down 36 percent since the merger. We'll find out in five or six years whether the merger made sense.

Bob Lenzner, national editor: Can it go back to being the phenomenal company that it once was?

Bruce Upbin: This company has radically new innovations.

David Asman: Well, Bob you've got some info on Citigroup (C) and you don't think we should worry about them, right?

Bob Lenzner: There are things to worry about but the stock is so cheap. It's selling around $30. This is a chance of a lifetime to buy Citigroup at less than ten times earnings.

David Asman: What about its competitors like JP Morgan (JPM)?

Bob Lenzner: JP Morgan got clobbered and is selling at book value. I think it's a little more questionable about JP Morgan. There's going to be lawsuits with the both of them and Citigroup is probably going to have to pay some fines. There's also a lot of off balance sheet debt.

David Asman: Okay Leigh Gallagher. What have you got for us?

Leigh Gallagher, staff writer: There's a company called Stryker (SYK) that makes medical equipment. They're based in Kalamazoo Michigan. They make everything from bone cutters to hip and knee replacements. This is a great industry to be in and this is a great company. Right now it's trading at around 30 times earnings.

Makers & Breakers

Viacom (VIA)

Dennis McAlpine, McAlpine & Associates: MAKER

Viacom has everything right going for it. They've got advertising recovery and content. Everything is going to go well for them.

Matt Schifrin, senior editor: MAKER

I like Viacom as well. They reported a billion dollars of free cash flow this summer. My two kids love Nickelodeon.

Bill Baldwin, editor: BREAKER

This company is all the work of one financial genius, Sumner Redstone. The problem with him is the ying yang and he has no succession plan.

Dennis McAlpine, McAlpine & Associates: Sumner Redstone is immortal. The only concern I have is, is he keeping Karmazin?

Walt Disney Co. (DIS)

Dennis McAlpine, McAlpine & Associates: MAKER

Walt Disney Co. (DIS) is a completely different story. Everything bad that could happen to this company has happened already. That means that everything in the future will be on the upside. You've still got the name though and that's the key.

Bill Baldwin, editor: MAKER

There's a new movement in corporate government to get rid of chief executives who have a bad year and who get paid ridiculous amounts of salary. They're going to dump Michael Eisner. They're going to bring in Jeffrey Katzenberg. And assets are going to become more valuable.

Matt Schifrin, Senior Editor: BREAKER

I've been a long term Disney investor and I'm fed up with this company. I bought them because I considered them a premiere network. I don't think they're premiere anymore. My kids prefer Nickelodeon and Viacom. This stock is a tax loss candidate for me.