Big-name stocks at bargain prices

Apr.18, 2008 in Market Outlook

Big-name bargains

By MarketWatch

Last Update: 3:39 PM ET Apr 17, 2008

BOSTON (MarketWatch) — Paul Larson, editor of the Morningstar StockInvestor
newsletter, says that “the market tends to overreact on things … and right now
it seems like the market is overreacting on a great number of companies on the
depressive side.”

In a radio interview with Chuck Jaffe, MarketWatch senior columnist, Larson said
that a recession is already priced into many stocks, which is why a number of big
names are bargains.

Larson said that Wal-Mart (WMT) would have fallen into that bargain camp but for
a recent run-up which has pushed the stock close enough to its fair value
estimate that it’s instead worth holding right now, while waiting for a better
price to inject more cash. Yahoo (YHOO) and Oracle (ORCL) went into the same
camp.

But Pfizer (PFE) and Microsoft (MSFT) fell into the bargain bin and were
classified by Larson as buys. He also put buy recommendations on Paychex (PAYX)
and AutoNation (AN).

Larson recommended that investors sell Sirius Satellite Radio (SIRI); he put a
hold recommendation on China Mobile (CHL) and CNOOC Ltd. (CEO), saying both fell
into the category of “good company, bad stock,” meaning that he likes the
operations and believes they are businesses with tremendous potential but
currently are selling at prices where investors aren’t getting great value for
their dollars.

Jaffe’s radio show regularly features expert reviews of stocks and mutual funds
suggested by MarketWatch readers; to request a stock or mutual fund for review,
send your name, hometown and the ticker symbols that interest you to .

Did you like this? If so, please bookmark it,