DISCLAIMER: THE FOLLOWING "Cashin' In Recap" CONTAINS STRONG OPINIONS WHICH ARE NOT A REFLECTION OF THE OPINIONS OF FOX NEWS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE WHEN MAKING PERSONAL INVESTMENT DECISIONS. IT IS FOX NEWS' POLICY THAT CONTRIBUTORS DISCLOSE POSITIONS THEY HOLD IN STOCKS THEY DISCUSS, THOUGH POSITIONS MAY CHANGE. READERS OF "Cashin' In Recap" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.
Stock Smarts
It was a bloody October in Iraq, and until now, the market has rallied in the face of so much pain. But is the war finally starting to take its toll on stocks?
Retired Army Colonel David Hunt, Fox News Military Analyst says it was indeed a terrible month in October in Iraq as we lost thirty-five soldiers there, but he believes that the U.S. decision to accelerate an Iraqi takeover plan will help stem the tide of violence. He believes that we will begin to see an improving situation there by the end of the year.
Jonas Max Ferris of Maxfunds.com says the market had priced in a quick and decisive victory in Iraq, and as the post-war pain continues, a market reaction is inevitable. He believes we are about to see that post-war pain reflected in lower stock prices.
Dagen McDowell of Fox Business News says that the Bush administration is acting aggressively to correct problems in Iraq, and the market will reflect that and continue to hang tough.
Price Headley of Bigtrends.com points out that the while the market does pullback the morning after a bad day in Iraq, it tends to shrug off the bad news by the end of that trading day. That’s a bullish indicator. He says money managers have too much cash, and they have to invest it despite the post-war pain.
Wayne Rogers of Wayne Rogers & Co. says the market is reacting to the economy and not Iraq right now.
Joe Battipaglia of Ryan, Beck & Co. says the perception is that we are losing our way in Iraq, and that could cause investors’ confidence to roll over if that perception is not changed soon.
Best Bet$: Bargain Stocks!
Find a stock that has been beaten down for no good reason, and you have found a bargain! Our crew named their favorite bargain buys right now.
Hilary's Bargain Stock: ConAgra Foods (CAG)
52-week high: $26.30
52-week low: $17.75
Friday's close (11-14-03): $24.25
Hilary says ConAgra is a great buy right now because it is misunderstood by Wall Street and selling way below what it’s worth. She cites insider buying as evidence of its attractive bargain price. Hilary owns shares in ConAgra. Joe says this stock has been a dog for a long time, and he thinks it still is a dog. Jonathan says this is a strong stock in a strong group, and he likes it.
Price's Bargain Stock: Verizon (VZ)
52-week high: $44.31
52-week low: $31.10
Friday's close (11-14-03): $32.61
Price says Verizon will benefit from the rule that will allow cell phone users to take their phone numbers with them when they change service because it is the largest and best-positioned provider. That rule goes into effect on November 24. Price does not own Verizon yet, because he thinks it could trade a bit lower on tax-loss selling, and that’s when he plans to buy. Joe is concerned that the new rule will hurt Verizon by shrinking its home service and offset any benefit Verizon may see on the wireless end.
Joe's Bargain Stock: LaBranche & Co. (LAB)
52-week high: $30.66
52-week low: $8.26
Friday's close (11-14-03): $8.34
Joe says this NYSE specialist firm is under siege from regulators and trading way below its actual value. He believes the company will survive the threat posed by regulators, making it a great buy at current prices. Jonathan calls this stock purchase a “death wish” because the company is on Eliot Spitzer’s radar screen, and he says he wouldn’t touch the stock right now. Price thinks new management at the company will ultimately help it. He says the stock may remain under pressure in the short term, but could be a good long-term bet. Hilary doesn’t like the stock.
Jon's Bargain Stock: Portugal Telecom (PT)
52-week high: $9.14
52-week low: $5.91
Friday's close (11-14-03): $9.04
Jonathan says the weak dollar is helping many European stocks and he likes the European telecom sector. He owns shares in Portugal Telecom. Price says it’s a strong stock in a weak sector and he thinks it could pull back. Joe says there are other parts of telecom where you can make more money and get greater liquidity, Portugal’s not the place.
Face-Off: Dow 11,000?
Is the Dow headed for 11,000 sooner than you think? Joe, Hilary and Jonas faced off over Dow 11,000.
Joe’s case: “The economy grows by 5.5 percent with 2 percent inflation, earnings rise to $58 on the S&P and the Federal Reserve doesn’t budge.” When you consider all this and the fact that all we need is a 10 percent move to get to 11,000 on the Dow, he says it will be done by this time next year. Hilary says we have had such strong growth so far that positive expectations are already baked into the market and it’s not going higher anytime soon. Jonas says the Dow is going to fall to 9500 by this time next year.
Cashin’ In Challenge
To find out who’s ahead in the $10,000 “Cashin’ In Challenge”, check out the Web site at: www.foxnews.com/challenge
Money Mail
Joe, Jonathan and Wayne answered some of your questions.
Question: “What's going on with Mylan (MYL)? The news from the company is great, but the stock is slumping. Why?
Joe says investors had great expectations on earnings; they came and went, and there wasn’t much more out there to move the stock. Plus, the company is involved in lawsuits with some larger companies like Johnson& Johnson (JNJ) and that is weighing on the stock. Jonathan doesn’t like the stock. Wayne says the fundamentals look good, but the chart looks terrible, and he wouldn’t want to own the stock right now.
Question: “Are there any publicly traded companies that could benefit from the rebuilding of California after the fires?
Wayne says the homes that need to be rebuilt are individually owned, and so the only companies that could benefit are home building supply companies like Lowes (LOW) and Home Depot (HD). Joe says he would not be buying housing stocks right now; he’d be taking profits.
Question: “What do you think about Ivanhoe (IVAN)? I bought it at $0.97 and it's up around $6. Should I hold, sell, or buy more?
Jonathan says the only reason to sell a huge winner like this is if it has become too big a part of your overall portfolio, otherwise put some stops just under where it’s trading now and let the market take you out. Joe says this stock looks like it is being driven by “wild-eyed speculation,” and he would use that to his advantage and take profits now.
Question: “I own a lot of Intel (INTC) and have made some good short-term profits. Should I sell, or do you see the stock climbing?”
Wayne thinks there is more upside to Intel. He owns the stock and likes it here. Jonathan says he wouldn’t bet against it, but it’s not his choice for new money. Joe says it’s the market-share leader, a low-cost producer, and in a rallying economy like we are in now, he calls this stock “a buy.”