Morris: Apple is innovator
Equity director at Lord Abbett & Co. is favorably disposed toward Merck
NEW YORK (CNNfn) - Robert Morris, director of equity at Lord Abbett & Co., shared his opinion on the rail sector Wednesday, as well as some positive comments on Apple, Ballard Power Systems and Merck.
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Name: David, Texas
Question: What do you think of Union Pacific (UNP: Research, Estimates), both short term and long term, and what about the railroad industry in general?
Answer: The rail sector in general and Union Pacific in particular are very inexpensive relative to the market. Lower fuel costs will be a plus in 2001. These stocks typically trade well when the economy is on an UP cycle, so the second half of 2001 looks like the optimal time for Union Pacific.
Name: Robert, New York
Question: I would be particularly interested in hearing the thoughts of analysts on fuel cell stocks and give some names of such stocks that may have strong potential gain over the next five-to-10 years. Also, do your analysts believe that the oil companies will try to stop fuel cell development?
Answer: The commercialization of fuel cell technology is near. In the Auto sector, the company with the best position is Ballard Power Systems (BLDP: Research, Estimates), which is working with both Daimler & Ford. California will require non-polluting vehicles soon; I would expect fuel cell cars to be an important part of that strategy within five years.
Name: Mike (location unknown)
Question: I have shorted several stocks and recently covered my short positions. I now think some of those same stocks are good buy opportunities. Do I now have to wait for 30 days to buy the stock? In other words, would the Wash Sale Rule apply to a change in position in a stock from short to long?
Answer: Any recapture issues like this would best off be referred to an accountant or financial consultant. As a general rule, though, if you take a gain on the short sale, there would be no implications for the wash sale rule -- the implications are only when you take a loss.
Question: I bought Merck (MRK: Research, Estimates) seven years ago at $31. The stock has since split 2-for-1. Should I take my profit and buy something else or hold?
Answer: I see no reason to sell Merck stock right now. Fundamentally, MRK has a very good product pipeline and an extremely strong management team.
Name: Linda (location unknown)
Question: What are your recommendations for Compaq (CPQ: Research, Estimates). My average cost is $26. Hold or take tax loss? Do you see any recovery for them in 2001?
Answer: Compaq has been beaten down. I would like to see CPQ's price base around $15. It looks attractive here, but I would wait for determination of the base before I buy. In a related note, in this sector, I also like Apple (AAPL: Research, Estimates), because they are likely to continue to be the innovator among PC makers; at this point, PCs are basically a commodity.
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-- compiled by Staff Writer Lucy Banduci