Do you remember the scene in the classic 1967 movie The Graduate when Dustin Hoffman is advised that the best opportunity for the future is in "plastics"? Well, today, the future looks even brighter -- but for a new generation of green chemical additives that make poly vinyl choride (PVC) more bio-based and fully biodegradable.
PVC is widely used in construction -- roofing, flooring and electrical cable insulation materials. But, PVC is also used in electronics, clothing and upholstery as well as for inflatable toys and pools. Interestingly, 50% of the world's PVC resin manufactured annually is used for producing pipes for industrial applications.
Stocks continue their winning streak today, with companies such as Apple (AAPL) and Google (GOOG) rising so quickly it almost seems like 1999 over again. But instead of chasing high-profile companies, Hilary Kramer, editor of GameChangerStocks.com, says there are some great opportunities in companies that are growing fast, but still haven't caught the focus on Wall Street.
Among her picks: SatCon Technology Corp. (SATC), which takes solar energy and wind power and uploads those technologies to the smart grid, and Horizon Lines (HRZ), a shipping company with an edge. One of them, says Hilary, could be a ten-bagger.
There are lots of analysts out there who say that, over the long term, stocks in the pharmaceutical sector should do well. For the most part, they are talking about cash rich pharmaceutical companies such as Pfizer (PFE), McKesson (MCK), Medtronic (MDT) and Forest Laboratories (FRX) according to Gene Marcial of our sister site, DailyFinance.
But there are other, less obvious ways, to play growth in the pharmaceutical industry as well. Hilary Kramer, editor of GameChangerStocks.com, recently recommended two stocks that are "under the radar" and could do very well in the near future.
Mortgage insurers such as Radian Group (RDN) and PMI Group (PMI) have been suffering from rising mortgage defaults. But the group could be turning the corner. On Tuesday, the largest U.S. mortgage insurer, MGIC Investment Corp. (MTG), posted a quarterly profit of $24.6 million compared to a loss of nearly $340 million in the year-ago quarter. That good news comes after three years of losses.
MGIC's results should bode well for Radian, which will announce its second quarter results on August 3, and PMI Group, which will release its second quarter results on July 29.
There is lots of talk about the Chinese economy slowing. Not surprising given rising housing prices and a booming economy. But Hilary Kramer, editor of GameChangerStocks.com, says investors shouldn't discount the opportunities available.
In this video, Kramer talks about two "under the radar" stocks that are traded on U.S. exchanges, but that will benefit from economic growth in China.
Hilary Kramer, the editor of GameChangerStocks.com, says that investors should consider ways to profit from rising revenues in investment banking. Kramer says that now, as the credit crisis abates and mergers and acquisitions begin to pick up, investors should closely watch a couple of fast growing New York City-based boutique investment banks that she says are undervalued.
One of them is Evercore Partners (EVR). Evercore was founded by banker and statesman, Roger Altman and specializes in mergers and acquisitions. The bank has been expanding internationally, partly through its acquisition of the British firm Braveheart Financial Services as well as a Mexican-based financial services firm. Kramer says Evercore should grow its asset management business by some 20% under its new chief executive, Ralph Schlosstein. Schlosstein, by the way, was the co-founder and president of Blackrock Group. Kramer expects that as M&A activity picks up and as the company's asset management grows -- and becomes profitable in the fourth quarter -- the stock should perform well, rising by 25% over the next year.
With the Dow Jones Industrial Average ($INDU) hovering around 11,000, Hilary Kramer, the editor of GameChangerStocks.com, says that in the short-term, stocks will continue to rise. Driving shares up will be first quarter earnings, which are expected to triple over year-ago comparisons.
But Kramer warns that once earnings season is over, investors should brace for a pullback of 7% to 10%. In this interview, Kramer talks about her views for the market, her strategy for picking winning stocks in unpredictable times and then recommends three undervalued stocks with great prospects.
For the past several days, I've been giving tips about how to predict trends and ride them to profits. My last tip is that sometimes you can make money by taking a clear trend -- and then ignoring it and investing in a less trendy stock, or even a stock that seems to be losing out because of that same trend.
Before you throw up your hands in frustration, hear me out. For just one example, take Pinnacle West (NYSE: PNW). This Arizona company has two divisions: real estate development and an electric utility. Not surprisingly, the stock has really sunk since the spring as investors started fleeing with the intensifying real estate woes; back in April PNW was trading just above $50, and in early August it was down around $37.
Most trend followers would sell this stock too -- who wants to be involved with any real estate development company? As I see it, however, the company has been excessively punished for its real estate division, and it's currently undervalued when one considers its electricity division. Arizona is a hot place with a growing population, and there's only going to be increasing demand for electrical power to cool the homes and offices of all these people. The company may not return to its previous profit levels, but I think investors have overreacted, and we could see this gain several dollars back. When you add some modest growth to a 5.3% dividend, you could find yourself with a nice little profit.
Type of stock: An Arizona company dealing in real estate and electricity.
Price target: If you can get this below $40, I think you'll see it get up to around $45 over the next year. That's a ten percent gain right there, plus a dividend to make it nearly a 15% gain. Plus if you hold long enough, real estate has to come back sometime. That could be at least a few years though, so you'll need to be patient.
Just over a year ago, I blogged that CNX Gas (NYSE: CXG), a natural gas exploration, development and production company that liberates the methane in coal beds and develops it into natural gas, was a stock pick with a strong future.
The release of methane from coal mines began as a safety measure back in the early 1980s. However, mining companies soon realized that money could be made from this coalbed methane. CNX Gas is one of the companies to tap this gas resource. It has enormous coalbed methane reserves, primarily in Appalachia , and the reserve life of its proved reserves is nearly 22 years.
At the time of my earlier blog, CNX Gas had recently split off from CONSOL Energy, a coal-mining company (which still owns over 80% of CNX's stock), and was going like gangbusters. In 2005, it saw 50% growth over 2004, and the first quarter of 2006 showed a 40% growth over the first quarter of 2005. CNX's pre-tax and net profit margins were twice as high as the industry average.
At the time, it was trading in the low $20s, and I recommended it was a good buy. Today, it is trading just over $30 and still presents a good buy, in my opinion. I'm not alone. A Bank of Montreal report issued this week notes that CNX is focused on evaluating 93% of its unevaluated reserves, and once the Rockies Express pipeline comes online, it will likely be the gas producer with the lowest prices in the country. It is aiming for 15% production growth in 2008, and analysts are confident that CNX is on track. So am I.
Type of stock: A natural gas exploration, development and production company that also converts coalbed methane to natural gas, with extensive proven (and unproven) reserves and a continuing record of extraordinary growth.
Price target: The Bank of Montreal report puts the target price at $37. Currently trading nearly at $31, I could see CXG hitting $40 in a year.
The market has turned since my last video update -- with the Fed's recent interest rate cut, now is the time to embrace your inner bull! I discuss buying strategies in this edition of StockWatch: Between the Bells.
Three stocks you should look into:
First Solar Inc. (NASDAQ: FSLR), a Phoenix manufacturer of silicon-free solar-power modules. FSLR is significantly undervalued, by as much as $40 if you believe Bank of America.
China Medical Technologies (NASDAQ: CMED), which develops cancer treatments in Beijing. CMED is expanding its operations into the rest of Asia, as well as into Russia and Europe.
After stalling a bit last month, Google (NASDAQ: GOOG) is pushing higher again, bound for $600.
Stay away from home builders like Hovnanian (NYSE: HOV) and Beazer Homes (NYSE: BZH) -- the ongoing mortgage meltdown is not over, and the housing market has yet to bottom out. Until then, also avoid home furnishings retailers, like Ethan Allen (NYSE: ETH).
Lastly, check out Baidu (NASDAQ: BIDU), China's leading search engine -- currently trading at $275 and soon to hit $300. Don't think that Google is considering a Baidu buyout? Think again.
My email inbox is full these days with investors wanting to know how to manage these fickle and turbulent markets. It is true that, given the increasing complexity and sensationalism (mortgage defaults, Chinese dominance, global warming) plaguing the financial markets, it is easy to lose one's way.
In Invest Like a Fox . . . Not Like a Hedgehog, Robert C. Carlson, editor of the monthly newsletter Retirement Watch and managing member of Carlson Wealth Advisors, provides a clear-cut essential guide for enhancing any investor's financial prowess. Carlson's innovative approach to developing investment strategies eliminates the "noise" that frequently overwhelms investors.
Invest Like a Fox is the type of book I personally look for: A driver's manual for the investor looking to navigate today's financial markets. The book trains you how to avoid looking back at your mistakes or successes, but instead promotes keeping your eyes on the volatile and bumpy road ahead. Packed with expert advice and in-depth insight, this all-inclusive guide will enhance the way you think about investing and assist you in creating an investment strategy.
In the current market instability, it's reasonable to wonder about the outlook for retailers like Nordstrom Inc. (NYSE: JWN). While Nordstrom is one of the leading purveyors of affordable luxury items, the company could be negatively affected if the economy suffers and consumers start pulling back.
But I'm cautiously optimistic about this company. For one thing, Nordstrom has affluent customers who are less likely to be severely hurt in purchasing power. But the company's revenues have also continued to grow at a steady rate, averaging 9% over the past few years. Even better, these results have been driven by solid same-store sales.
You really should watch Hilary Kramer: Market has further to fall, but there is opportunity in KDN, CBI, ACH to get some market perspective. The video was posted on August 21, 2007 and she makes some very good stock recommendations. Over the past 18 months that I have been looking at her picks versus those of James Cramer, I have found that you would have done better with Hilary.
While giving her full credit for her stock picking and market coverage I find I must strongly disagree with a statement she made. Cautioning viewers that " There is going to be a meltdown" is not overly alarming, but I take great exception to her stating that "This market can go down 25%." She shared her fear that there are 9000 hedge funds and that 3000 might close down.
It is possible that people may panic in certain circumstances and the market can stray into irrational short-term behavior once again, but I find her reasoning a little soft. Let's assume that the 9000 hedge funds own 50% of the total equity in the stock market (they don't) and one third go out of business, that would equate to a 15% collapse of value (unscientific, I know, but there is some correlation).
The stock market has stabilized somewhat in recent days, but I still have a very pessimistic outlook for stocks, as I explain in this video. I think stocks could fall another 25%.
Internationally, I suggest looking to China plays like Aluminum Corp. of China Limited (ADR) (NYSE: ACH) and global environmental plays like Veolia Environment (ADR) (NYSE: VE). Finally, I offer a stock tip: Darling International Inc. (ASE: DAR) is a little-known environmental company which gets paid to collect waste like animal by-products and cooking grease and turns it into biodeisel which it then sells. Enjoy the video!
A leader in the industrial sector, Danaher Corp. (NYSE: DHR) designs, makes and markets brand name products, services and tech across three categories: Professional Instrumentation (electronic testing, environmental, and medical technologies); Industrial Technologies (motion and product Identification; aerospace and defense, power quality, and sensors and controls); and Tools & Components (which include mechanics' tools and general tools under brand names such as Craftsman.)
It is a leader in many of its classes, with names like Fluke (handheld electronic and network test equipment), Gilbarco Veeder-Root (retail petroleum dispenser market), and Hach/Lange (water analytics). A huge company in the industrial sector can sometimes seem overwhelming (what ARE all of these things, after all? you might ask...), but the thing to know first is that Danaher is solid as they get, with great margins, good management, and is well positioned for continuing growth, particularly through acquisitions.
On July 19, after DHR's excellent second quarter earnings report, Goldman Sachs wrote that Danaher was "well-positioned" for the 2H2007 upside. Time to get in now, its report suggested, and I agree. It set a nice price target of $90. With low operating risk, and consistent growth of revenue, Danaher is a safer pick. Plus, as the Goldman report points out, it is "a leader in defensive growth markets like water, electronic test, and medical," making its price less susceptible to the recent jitters in the market.
Type of Stock: An industrial designer, manufacturer, and marketer, Danaher is a leader in its class in many areas, and has demonstrated solid growth in areas less likely to suffer by market instability.
Price Target: Trading now at $75.80, I agree with the Goldman target of $90 and feel Danaher is well positioned to even exceed this.
Hilary Kramer is a financial editor and money coach for AOL and an authority on investing. Visit her at www.hilarykramer.com.
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Do you remember the scene in the classic 1967 movie The Graduate when Dustin Hoffman is advised that the best opportunity for the future is in "plastics"? Well, today, the future looks even brighter -- but for a new generation of green chemical additives that make poly vinyl choride (PVC) more bio-based and fully biodegradable. 
Stocks continue their winning streak today, with companies such as Apple (
There are lots of analysts out there who say that, over the long term, stocks in the pharmaceutical sector should do well. For the most part, they are talking about cash rich pharmaceutical companies such as Pfizer (
Mortgage insurers such as Radian Group (
There is lots of talk about the Chinese economy slowing. Not surprising given rising housing prices and a booming economy. But Hilary Kramer, 
Hilary Kramer, the editor of 
With the Dow Jones Industrial Average ($
For the past several days, I've been giving tips about how to predict trends and ride them to profits. My last tip is that sometimes you can make money by taking a clear trend -- and then ignoring it and investing in a less trendy stock, or even a stock that seems to be losing out because of that same trend.
My email inbox is full these days with investors wanting to know how to manage these fickle and turbulent markets. It is true that, given the increasing complexity and sensationalism (mortgage defaults, Chinese dominance, global warming) plaguing the financial markets, it is easy to lose one's way. 
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