TOM HUDSON: No doubt about it, investors have gotten paid some pretty fat profits to take risk this year. Small caps stocks, technology stocks, emerging markets have all rocketed higher. Tonight’s “Market Monitor” thinks there’s still some room to run. Alan Lancz back with us. He’s director of lanczglobal.com with us tonight at the NASDAQ. Alan, great to see you again. How much more room to run here with the S&P 500 at its highest level since June of ’08.
ALAN LANCZ, DIRECTOR, LANCZGLOBAL.COM: The market feels Tom like it wants to go higher. It’s hard to say how much especially with the concern over energy prices right now. That will put a dampener on big progress from here but it still seems like it wants to go higher. I would take profits in this strength, at least partial profits and lighten up like we did in late April last year. But right now, it looks like all systems are go. Everybody is looking at the glass half full.
HUDSON: To that point though, still staying almost fully invested, taking a little bit of money off the table from the rally, is that fair to say?
LANCZ: Yes, definitely.
HUDSON: OK, some new ideas though where you are putting money to work. You’re looking back at basic materials, an area that really hasn’t participated much in the rally this year. AK Steel, AKS is the ticker symbol. What makes you attracted to this one? A year ago this thing was almost twice what it is today.
LANCZ: We’re looking at areas that haven’t moved yet and AK Steel is very uncompetitive (ph) type company. Management has really significantly reduced their health care and retiree costs and they’ve vertically integrated some of their operations which will give them tighter controls on costs. So a company that was very inefficient and really uncompetitive will become as far as a force in the industry and Wall Street has reflected that Tom. That’s what we like about it.
HUDSON: You like it more for some financial accounting as opposed to just in demand when it comes to the materials.
LANCZ: Yeah. I mean we were buying a lot of the basic materials and cyclical growth plays going into the year. A lot of those companies have moved up, so this is one that your viewers can participate in.
HUDSON: You also like CSG Systems, the ticker symbol on this on CSGS, customer services for cable TV, telephone, utility. You name it. It has had a nice rally from the October low, but you still think there’s some headwind there.
LANCZ: All they did before was billing services really for the cable and direct broadcast satellite and in the last years, they’ve made acquisitions where now they do customer service and a lot of analytical and that’s what we like, the analytical part of where I think they can define a real good niche there and earnings should grow appropriately and the stock is 30 percent cheaper than its peers. So again, another one, higher risk but I think has potential.
HUDSON: Looking for valuation again here. One quick one, give us 20 seconds on Eldorado Gold (NYSE:EGO), the gold miner, EGO the ticker symbol, mines in Brazil, China and Greece.
LANCZ: Low-cost producer which we like. If your viewers haven’t participated in gold yet, a good time to get in because the stock hasn’t moved even though gold has gone up, so especially on weakness in all three of these, I think they’re great opportunities.
HUDSON: Last time we saw you was last summer, June 24th of 2011. You had three picks back then, one in finance, American International Group (NYSE:AIG) pretty much unchanged here. General Motors (NYSE:GM) you like. It’s 13 percent cheaper today and TDS, Television Data Systems about 3 percent cheaper. Do you still like any of these?
LANCZ: I would buy those on weakness. We started buying them last summer and buying on weakness, just like these previous three and if they went back in the low 20s, we’d buy them for a round trip.
HUDSON: You own all six that we mentioned tonight?
LANCZ: We own it. Our clients own it and family members.
HUDSON: Al, have a wonderful weekend, thanks for the ideas.
LANCZ: You too, no problem.
HUDSON: Alan Lancz or Friday “Market Monitor.” He’s with lanczglobal.com.