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Stock picks by the pros
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June 29, 1999: 1:40 p.m. ET
Burlington Resources, Bristol-Myers Squibb, General Motors
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NEW YORK (CNNfn) - The nation's analysts and money managers continued the hunt for promising companies Tuesday, finding value in semiconductor makers, a pharmaceutical company and the nation's largest carmaker.
Here are the stocks the latest guests appearing on CNNfn are buying and why:
Vince Farrell, chief investment officer at Spears, Benzak, Salomon & Farrell, favors oil stocks for their relative cheapness.
"The two that I've liked for some time are Burlington Resources (BR) and Unocal (UCL). Both came down in price, and I'd be an enthusiastic buyer of both of them," Farrell said. "If you want something bigger, Texaco (TX) looks kind of interesting. It's down, I think, five or six points off its most recent high."
Shifting sectors, Farrell recommends AutoNation (AN), an auto dealer that recently launched a national Web site for buying cars.
"All the other Internet companies that have auto Web sites only lead you to a dealer. You still have to buy the car from a dealer," Farrell said. "Well, now, (AutoNation) has a Web site that leads you to them. They are the dealer. So I think it's going to be pretty good."
Vince Farrell, left talks to CNNfn's John Defterios and Deborah Marchini
Terence Gabriel, stock market strategist at Idea Global.com, favors semiconductor makers for their turnaround potential
Specifically, he picks Applied Materials (AMAT) and Computer Sciences (CSC).
"Computer Sciences has strong contract revenue," Gabriel said. "They are making a push into Asia. We're seeing a recovery developing in Asia. Computer Sciences should be able to participate in that."
General Motors shareholders: be patient. So says Richard Cripps, chief market strategist at Legg Mason, who predicts the market eventually will recognize how undervalued the nation's largest car maker is.
"And while you are waiting, you get a 3 percent yield and one of the strongest balance sheets in corporate America," Cripps said.
The market strategist also recommends Interim Services (IS), a personnel services provider that he calls vastly undervalued.
"Good earning growth," Cripps said. "Next year, their earnings will be about $1.90 (per share). That's just 10 times this year's current stock price."
For the investor looking for reliable stocks, Alan Skrainka, chief market strategist at Edward Jones, recommends MCI WorldCom (WCOM), which he views as a unfailing performer that is much less volatile than Internet stocks.
"I think just about every analyst on Wall Street believes that MCI WorldCom will grow cash flow at twice the rate of AT&T (T) over the next five years," Skrainka.
In the drug sector, Skrainka favors Bristol-Myers Squibb (BMY). He says the maker of Excedrin is developing a series of potentially profitable drugs.
"We think they do have a great pipeline in the areas of cardiovascular, cancer and AIDS," Skrainka said. "These are the fastest growing areas in the pharmaceutical industry."
Finally, Skrainka predicts this week's expected interest rate hike won't be enough to quell consumer spending.
As such, he likes shares in Wal-Mart (WMT), particularly for the large retailer's international strategy, which he says will result in overseas sales accounting for 30 percent of Wal-Mart's business over the next five years.
The views presented here are solely those of the analysts quoted. They do not represent opinions of CNNfn on whether to buy or sell shares of a particular stock.
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