Our panelists give you the scoop on all the inside business information before you hear it anywhere else in The Informer segment:
David Asman: I thought H & R Block (HRB) just did taxes but I was wrong. Tell us about them, Leigh.
Leigh Gallagher, staff writer: Well, David you're not alone. Wall Street and Forbes magazine have historically loved this stock. But it may be time to get out. What most people don't know is this company gets a quarter of its revenues and half of its earnings through mortgage operations. It's only a matter of time before people stop refinancing and interest rates go up.
Chana Schoenberger, staff writer: I'll tell you why they won't be doing taxes too much anymore. We had our taxes done there once and the guy just didn't know anything.
David Asman: All right, not too much confidence in H & R Block. Chana, let's talk about radios. They may be making a comeback, right?
Chana Schoenberger: Radios have always been pretty strong. I'm talking about Clear Channel Communications (CCU). Where ever you live, there's probably three or four Clear Channels in your market. There was a big scare for them a couple of years ago when people thought satellite radio would kill their business. Those people were wrong. Satellite radio just hasn't taken off and it's been a good year for Clear Channel.
Bruce Upbin, senior editor: Digital radio is coming, which makes the local stations sound much better, which is a big selling point for satellites.
David Asman: Okay, Joanne Gordon. You've got news on C.H. Robinson (CHRW)?
Joanne Gordon, staff writer: This company arranges for freight services. They were recently hit with a nasty lawsuit alleging a nasty work environment and unpaid overtime for possibly hundreds of workers. But investors haven't reacted to this yet. The stock has barely budged. I don't think C.H. Robinson's insurance can cover all the potential pay-outs. This is not a frivolous suit and it's not going to go away quickly.
Leigh Gallagher: Do they actually have class-action status yet?
Joanne Gordon: They're applying for it right now. But even if they don't get it, I still think you're going to see hundreds of employees come out demanding hundreds of hours in back pay.
David Asman: Okay, let's move on to Bruce.
Bruce Upbin: I've got news on Celera Genomics (CRA). They're famous for mapping the human genome. Their next endeavor is drug discovery. They're trying to discover proteins that can make really good drug targets. They're losing money now and will lose money for a while, but they have a ton of cash. They have about $880 million, which should take them into 2008.
Makers & Breakers
New York Community Bancorp (NYCB)
Ken Kam, Marketocracy.com: MAKER
I like New York Community Bancorp. Interest rates are still at 40-year lows, even with the pickup in mortgage rates. We think that this is going to cause a lot more people to refinance their mortgages and lock in these low rates. Regional banks are going to be the beneficiaries. New York Community Bancorp is one of the best ones.
Elizabeth MacDonald, senior editor: MAKER
I'm with you on this one. It operates in the lucrative multi-family mortgage niche. And they have pre-payment penalties so that protects them. I like this stock.
Jim Michaels, editorial vice president: BREAKER
You picked a good company but I don't see any compelling evidence of why I should buy it. It's at twelve times next year's earnings. You could buy Citibank at eleven times earnings and get the whole world franchise.
American Power Conversion (APCC)
Ken Kam, Marketocracy.com: MAKER
American Power Conversion makes the uninterruptible power supplies that I think everyone is starting to buy. It used to be you just protected your server from problems but now we've seen, with problems out in California and the power lines, that it's important to protect every computer. That's going to be a big upside for this company.
Elizabeth MacDonald: BREAKER
I'm a breaker on this because Standard and Poor just did a study and rated this company at the bottom of corporate disclosure practices. We know that credit quality is linked to corporate governance. This company's filings are very opaque.
Jim Michaels: BREAKER
Again, I like this company but it's capital spending is in the tank and it's not showing any signs of getting out of the tank. I don't find it a compelling buy.
Ken Kam, Marketocracy.com: I agree on the capital spending point but if you're going to spend any money, you need to spend it on protecting the computers you already have. And that's why I think this company will benefit.