Friday, March 21, 2008
In this environment, one can easily take lousy stocks for "dirt cheap" opportunities. But if current trends continue, and that's big a "if", then the "second coming" of commodities should be a boon all commodity-levered stocks. Potash (POT) and Monsanto (MON) are among great agri-stocks that have lost some steam lately. First Solar (FSLR) and SunPower (SPWR) as well as Ormat (ORA) are great plays on alternative energy possibilities. Coal stocks can see another rise when steel price recover from recent decompression in the commodities prices. Peabody (BTU), Fording (FDG), Patriot (PCX) and even the mining equipment maker, Joy Global (JOYG), are among my favorites. I have to give a big word of caution: commodity plays are subject to the global expansion that has been going on for a while now. As the saying goes though, when US gets a cold, the world catches pneumonia, so a global recession, which is likely at this point, can put a damper on these price for some time. Global engineering and construction plays like Flour (FLR) or Foster Wheeler (FWLT) may have a better time since oil and commodity money flows to large projects as governments try to boost the infrastrcuture necessary for production of commodities.
Posted by Dr. N at 12:55 PM
The last recommendations, along with almost every other stock in the market, have been beaten down badly, OK, very badly. But that's not reason to stop looking for new opportunities. I still think that BX, MXB, and N will have fantastic long-term prospects. But more recently, Riskmetrics (RMG) and Visa (V) debuted in IPO market. Riskmetrics got hammered in the wake of "virtual collapse" of Bear Stern (BSC) --- another pick of mine in "dirt cheap stocks"! Obviously billioniare Lewis and I took a big hit but JPMorgam (JPM) would reap all the benefits that should have been ours!!! --- mostly because models riskmetrics produces are of great interest to risk-managers and risk-takers! But the firm has a unique position in that niche (it is wothwhile to remember that JPMorgan was the parent of Riskmetrics! So if JPM's astute money sneaffing is any indication, RMG's IPO should be a great way to take advantage of the upside.) Visa (V) and Mastercard (MA, another recommendation of mine) are the duoploy in the credit card market. With the craze in using the plastic here in US and just about everywhere else in the globe, the transaction volume and revenues should rise. The impending legal battles and IPO's lock-up period can hinder short-term price appreciation, but if MA is any indication, the three- to five-year upside is great.
Posted by Dr. N at 12:40 PM