Here, we look at a variety of ideas: Vivian Lewis looks to Eastern Europe; Doug Hughes highlights a favorite banking bet; Jim Collins offers two relative strength favorites; Mark Leibovit looks at a uranium play; and Jessica Chiaverini offers her favorites in the drug sector.
(For more on the advisors cited below, click on their photos.)
"We have found a new stock idea in Eastern
Europe," says Vivian Lewis, editor of Global
Investing. "Coca Cola HBC (CCH NYSE) is a
Greek Coke franchise-holder. In fact, it is one of the largest Coke bottlers on
earth, operating in 26 countries. I have hopes for its corporate
governance, since Sir Michael Llewellyn-Smith, an old family friend and former
Ambassador to Greece, sits on its board. It has been hurt, as all Coke bottlers
have, by the ‘Dasani’ water fiasco, when it was found that the water
was taken from the tap, and contaminated with metals. A cold summer in
Eastern Europe also hurt 2004 sales. Meanwhile, CCH is a a play
on the falling dollar since its fixed royalty, advertising, and fees from
Coca-Cola are set in greenbacks, but sales are in Euros and related
currencies. So if the dollar sinks and sales pick up, profits can rise
quite sharply. I consider CCH a bargain."
Doug Hughes, editor of
Small Bank Newsletter, looks for fundamentally sound banks, while also
considering their potential takeover appeal; his previous recommendation for
Hibernia was just bought out at a 90% premium. Here's his latest: "Webster Financial
(WBS NYSE)
is the largest independent bank in southern New England, with total
assets over $17 billion. The bank continues to grow by opening new branches in
new markets as well as doing small and medium size acquisitions. They are
growing into some very affluent markets in Westchester, NY and
Fairfield, CT. Insiders have bought a little stock this month, usually a good sign.
We would start to buy it now. They have a book value of almost $30 a share. We
look for earnings to approach $3.80+ a share in 2005. We think a p/e of 13 is
fair for a $50 price target within one year for an 11% + return, plus the 2% cash
dividend and a takeover value near $60. Accumulate under $45 and buy all
you can under $43."
"Two of our recent featured stocks are in the energy sector,"
notes Jim Collins, editor of OTC Insight.
"Headwaters (HDWR NASDAQ) is a market leader in enhancing the value
of coal used in power generation. The company develops proprietary technology to
convert or upgrade fossil fuels into higher-value products and sells chemical
reagents that concert coal into a solid alternative fuel (which happens to be
eligible for tax credits). In the quarter ended December 31, net income rose 29% amid
revenues increased 115%. ATP Oil & Gas (ATPG NASDAQ)
acquires and develops offshore natural gas and oil properties, primarily in the
Gulf of Mexico and the North Sea. Eleven projects are in development which
should help drive a production growth rate of over 50% for 2005. The stock shows
a relative strength reading of 99—
out of a possible
100."
"Cameco (CCJ NYSE)
is engaged in exploring and mining uranium ore," notes Mark
Leibovit, editor of the trading service, Volume Reversal
Survey. "The company is also a
commercial converter of uranium concentrates. Through its subsidiaries, the firm
has a 31.6% limited partnership interest in Bruce Power Limited Partnership,
which operates a nuclear electricity generating facility in Canada,
which has six nuclear reactors at the facility in service. While Cameco
continues its principal focus on the nuclear business, it is also engaged in the
gold business. One of the Company's subsidiaries has a one-third operating
interest in the Kumtor gold mine in the Kyrgyz Republic in Central Asia.
Another subsidiary is engaged in developing the Boroo gold mine in
Mongolia. Technically, our ‘volume reversal’ projections point to a target
in the 53-58 range for our this 'uranium play' favorite. Keep a mental stop
around $36.00. CCJ still remains a big picture play for the growing world demand
for uranium and the growing world construction of nuclear
plants."
"The past few quarters have been quite tumultuous for the
pharmaceutical sector," says Jessica Chiaverini, associate editor of
The Prudent Speculator and portfolio manager at the Al
Frank Funds. "Even so, our long-term philosophy allows us to
remain big fans of the group. While the drug sector may not be the
indestructible Goliath that it once was, at the same time the industry is
certainly not on the verge of collapse. Demand should continue to be strong due
to the aging of the baby boom generation, a lengthening of life expectancy, and
an increase in chronic diseases. Positive demographics, a new wave of
consolidation, potential excess cash from repatriated overseas earnings, and
projected industry growth rates in the high single digits are all reasons we
contend that there is much value to be found among major drug stocks. We like
many companies in the sector, but only Merck (MRK NYSE), Pfizer (PFE NYSE), and Bristol-Myers Squibb
(BMY NYSE) are
on our buy list. In particular, Merck and Pfizer both have multiple
blockbusters, strong balance sheets, high dividend yields, and hordes of cash."
