Brenda Buttner was joined by: Gary B. Smith, RealMoney.com columnist; Pat Dorsey, director of stock research at Morningstar.com; Tobin Smith, founder and chairman of ChangeWave Research; Scott Bleier, president of HybridInvestors.com; and Gregg Hymowitz, founder of EnTrust Capital.
Profits. They're called the bottom line on a balance sheet and they're the bottom line for your investments.
Another earnings season is over, and what did Wall Street do? Nothing good! Friday was the Dow's lowest close in over two months… below that magic 10,000. And the Nasdaq, it hasn't been this low since October of last year.
What worries Pat is not the earnings that were just reported, but how optimistic everyone is about the second half of the year. Companies are not scaling back expectations, and he does not see the growth that strong in the second half.
Gregg is a bit more optimistic and sees some bottoming in earnings, good looking interest rates, and no inflation. He thinks that people are not afraid to be in stocks, but are afraid of the situation in the Mideast.
According to Tobin, the problem is that companies are not being priced according to what their earnings and growth are going to be.
Gary B. charted the Dow's performance for this month. The discouraging thing to him is that any good day is followed by a bad day. It's all about emotions, and people need to see more good days than bad.
Scott said it's not about earnings, but about investors taking money out of large stocks, and putting it into other places and cash.
It was time to look at some of the best and worst picks and Predictions.
First, the good ones.
On February 2nd Tobin said: Gas prices heading higher; buy EOG (EOG). Back then it was just above $33, and now it's up around $42, a gain of 27%. He thinks it might go up a little more, but gas prices have softened, so now would be a good time to take profits.
On December 22nd Gary B. said: Buy Procter & Gamble (PG).
And since then, it's up 12%. He thinks it can still go higher because it is in a steady uptrend with no weakness so far. However, if it closes below the uptrend line it established in April of last year, it's time to get out!
On January 19th Pat said: IBM (IBM) falls 20% by July 1.
At the time that Pat predicted this, IBM was trading above $114. On Friday's close it was at $84.70, falling even harder and quicker than he had thought. Pat said times will get harder for the company, and not to pay more than $75 for the company. Gary B. chimed in and said that the chart doesn't look that good either.
On March 9th Scott said: Quest Diagnostics (DGX) up 30% by year-end.
The stock is closing in on that move, up 25%. But Scott said it will not make it to a 30% gain because a lot of money has come out of pharmaceutical companies, so it's time to take profits.
On February 23rd Gregg said: Dell's (DELL) a "Tech Winner."
Dell has made a nice move of 9%, while the Nasdaq has gone lower. He thinks the stock is too expensive to buy right now, but if you own Dell, hold onto it.
Now onto the not so good ones.
On January 19th & 26th Scott & Gregg said: Tyco (TYC) is a buy.
Since that time, Tyco has taken a beating, losing 57%. Gregg admitted that the stock has been a disaster. But he thinks the stock is cheap and believes all of its accounting problems are done. If you're willing to risk some money, he said there are some gains to be made in this stock. Scott does not like the stock now.
On March 23rd Pat said: Bristol-Myers' (BMY) drop is a great buying opportunity.
But it really wasn't, and fell further, losing 26%. Pat fessed up and said he underestimated just how bad their management is. However, if the company achieves minimal growth, it will be worth $40 in 5 years.
On April 6th Gary B. said: Sticking to my guns; S&P going up 10%.
The charts misled the Chartman on this one because the S&P 500 has lost 4% since he "stuck to his guns" and repredicted that the S&P would make the 10% move. He's still firm on his call, but now thinks that the 10% will come from 1,075 level.
On December 15th Tobin said: PerkinElmer's (PKI) X-ray machine helps stock.
PerkinElmer sold that division of the company, and investors sold the stock big time! It fell 61% since Toby's prediction and he said there's no hope for the stock now. But he did say that a great lesson that can be learned from this. When someone on the show says something about a stock, and the news changes, sell the stock!
Tobin: WorldCom (WCOM) now cheap enough to buy!
Scott: Planets aligning for Sony (SNE). Buy!
Gary B: Party is over for P.F. Chang's (PFCB)!
Gregg: Foreign investors ignite rebound for stocks!
Pat: CYTYC (CYTC) sell-off overdone; stock a bargain!