Our panelists give you the scoop on all the inside business information before you hear it anywhere else in The Informer segment:
Chana Schoenberger, Staff Writer: Kmart (KM) has not been doing so well lately. (Note: Kmart filed for Chap 11 Bankruptcy on Tuesday, Jan 22) The CEO had his chairman title taken away from him and the president has left the company. But what's bad for Kmart is good for Wal-Mart. Wal-Mart is the biggest retailer in the world.
Bruce Upbin, Senior Editor: Kmart is going to have to sell the leases on its best stores and most of those leases are going to go to Wal-Mart.
Mike Ozanian, Senior Editor: Wal-Mart is already at 40 times earnings. A lot of these hypotheticals have already reflected on the stocks.
Rich Karlgaard, Publisher: Kmart is a technology stock. It still has room to scale and grow and so I think their earnings multiples are justified.
Mike Ozanian: If there's any upside to this company I think it's overseas.
David Asman: Okay, Bruce. What have you got?
Bruce Upbin: I like the wireless stocks like Sprint PCS and Verizon. Those companies have gotten hammered. Sprint is down 30% year to date. Historically, investors have done very well buying these stocks when they're down.
Chana Schoenberger, Staff Writer: Well I don't see why in the next 6 to 8 months they would come back? What's going to catalyze that?
Bruce Upbin: They probably will trade up and down. I'm looking more ahead to 12 to 15 months.
Rich Karlgaard, Publisher: I think 2002 is going to be a great year for wireless local network. But I think the winners are going to be some of the smaller local companies that you haven't heard of.
David Asman: Ok Rich. Let's stick with you. You've got gadgets.
Rich Karlgaard: Remember how cellphones went from rich man's toy to mainstream about 5 years ago? This is what's going to happen with digital cameras this year. There's a lot of implications from this. The film industry is going to go down. The winners will be the chip companies like National Semiconductor (NSM), Hewlett-Packard (HWP), and Nokia (NOK). The prices will ride the digital curve but ultimately you'll get some pretty good cameras for under $200 this year.
Bruce Upbin: I use digital cameras a lot. The problem is you use it and you also bring along your video camera and Kodak gets a bump from that too. I think Kodak has it beaten down too far.
David Asman: Okay Mike. Major League Baseball and the battle over the Minnesota Twins.
Mike Ozanian: The story is there's no contraction and no player locked out on strike. The senate came back to baseball and told the commissioner, 'We know you've taken loans from the owner of the Twins.' They should get rid of Selig the commissioner and get someone else in there.
Rich Karlgaard: We just came off maybe the best World Series in a long time. Baseball is on a roll.
Bruce Upbin: Selig was supposed to be an "acting" commissioner and he's been a commissioner now for what, 10 years?
Mike Ozanian: The owners just signed him two new 3 year deals. What the Senate did really was say, 'We've got this dirt on you. You've got to cut the contraction out.'
Makers & Breakers
Oxford Health Plans (OHP)
Gregg Hymowitz, Entrust Capital: Oxford Health Plans (OHP) is a leading health care company. It's a very cheap company. It's at 12 times earnings and generates a big amount of free cash flow and buying back a lot of stock.
Jim Michaels, editorial vice president: BREAKER
I'm going to stay away from this one. Their earnings are flat and they only made them grow by buying their own stock. Second, if anything like the patients rights bill is passes the lawyers are going to swarm all over this company.
Gregg Hymowitz: Actually that's not right. They get about 4-5% out of stock buy-back. And premiums are going up so I think ultimately this stock is moving up.
Pete Newcomb: MAKER
I like this stock. It's cheap at 13 times earnings.
Liberty Media (L)
Gregg Hymowitz: This is John Mallone's empire. The stock is down a lot but advertising revenue ultimately comes back as the economy improves. This stock is trading at a 13% discount right now.
Pete Newcomb: MAKER
I love this stock. It's a nice cluster of entertainment assets. And I would never bet against John Mallone.
Jim Michaels: BREAKER
I hate to bet against John Mallone but a lot of his shareholders haven't fared too well. This has got a $33 billion market cap and there's no earnings in site. In this kind of a market, I get a little nervous.
Calpine Corp. (CPN)
Gregg Hymowitz: Calpine Corp is (CPN) is one of the leading electricity producers in the nation. This is not a trading company. Again, the stock is cheap. It trades at 8 times earnings. The play here again is the economy improves, electricity demand increases.
Jim Michaels: MAKER
Just so you don't think I'm totally against you I'm a maker on this one. The best time to buy a stock is when it's unjustly knocked down. People think this is another Enron but it's not. It's got solid assets I like this stock.
Pete Newcomb: BREAKER
A half a dozen analysts have lowered their rating for this stock which should be a reason to buy this stock but I think there's an energy surplus right now. I think you should wait around another year or so.
Gregg Hymowitz: They have lowered their earning estimates. It's at 8, 9 times earnings and I think it's attractive.