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Andy Serwer Commentary:
Street Life by Andy Serwer Column archive
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Serwer: Berries, groceries and bird flu
Don't sweat the Blackberry battle; stay away from the grocer, and think about a med play.
December 22, 2005: 8:40 AM EST
By Andy Serwer, Fortune editor-at-large

NEW YORK (CNNMoney.com) - How about going to the rim, dumping the groceries, and going to the birds? ...

RESEARCH IN MOTION: Fill it to the brim with RIMM! Did you see last night that the maker of Blackberry reported boffo earnings, up 33 percent, more than expected. Stock should be a big mover to the upside. I look for these gains to stick, with more to come. Here's why. First the patent case they are involved in won't mean Dick Butkis at the end of the day. (A form of legalized extortion if you ask me.) RIM'll just write 'em a check eventually, so what? But more importantly, (to paraphrase what they say about the Rolling Stones) this company makes one of the only two handheld electronic devices that matter, (the other being the iPod.) This is a much-loved, highly-branded hot product. The stock is expensive (P/E of 22), but not crazy. RIMM's been much higher before and I say the stock (Research) of the Waterloo, Ontario is poised to keep headin' north.

ALBERTSONS: Oh Albertsons! (Why am I reminded of Glenn Campbell's song 'Galveston, O Galveston'?) What do the boys in Boise want? Company looked like it was close to a $9.6 billion buyout, but now talks have broken down. Great. The business of the great American supermarket has gone kaput. All the playas in the middle: Albertsons, Kroger, Safeway, (also see Dixie, Winn) are being eaten alive by Wal-Mart on the low-end and Whole Foods on the high end. (WFMI. Now THERE's a stock!) Wal-Mart's margins are lower, Whole Food's are higher than the typical 1 percent of the usual suspects. I would avoid Albertsons (Research) and the other mid-level names as well. And note to Albertsons' dudes, better sell quick before the price goes down. (Watch out for falling prices!)

HENRY SCHEIN: Looking for a bird flue play? (Come on, I know you are!) Henry Schein is a Melville, New York-based maker of latex gloves and hypodermic needles. The company also distributes Chiron's Fluvirin flu shots and other medical supplies to docs' offices. Now it's up 25 percent this year, and of course it's pricey, but gloves and hypos is a good business, bird flue or not. Company (Research) could get bought at some point too.

________________________

Email Andy Serwer at serwer@fortunemail.com.  Top of page

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