CNBC"Kudlow & Company" November 28, 2006
In a segment featuring highly regarded fund managers, Nick Calamos highlighted some of his team's top stock picks.
Nick P. Calamos, CFA and co-chief investment officer of Calamos Investments, appeared Tuesday on CNBC's Kudlow & Company in a segment called "Kudlow's Stock Club," which features highly regarded fund managers and their top stock picks.
Calamos highlighted five stocks his team is currently bullish on—Microsoft, Harley Davidson, Oracle, Home Depot and Nike—all of which, Calamos said, "are great businesses selling at a discount and generating high return-on-capital."
On Microsoft, Calamos said earnings are up while the stock price is down. The company has a "great balance sheet" and new product cycles coming out.
Harley Davidson is generating high return-on-capital and favorable top-line growth; furthermore, the company has "demographics in their favor," Calamos said.
Oracle, according to Calamos, has seen double-digit top-line growth and has made some good acquisitions. The company also has been successful at generating revenue.
As for Home Depot, Calamos said with earnings way up and stock price down, "We think the stock is just too cheap." Asked whether a slowing housing market could continue to weigh the company down, Calamos said, "We're just going through a slowdown here, and probably going to gravitate to a little bit more normal housing cycle. We just had a boom here, and there's no reason for a bust, unless we see a recession, but we don't."
Finally, Calamos said he is watching Nike because of its high return-on-capital and discount to the market. Calamos said Nike also has an interesting new product line, and that the company has been able to leverage its international business, which represents a large portion of the company's sales.
As a member of the Kudlow & Company stock club, Calamos will eventually return to the show to discuss his stock picks and their performance.
For more on Nick Calamos' view on the market and long-term investment opportunities, please visit our commentary section.