Saturday, June 11, 2011

Safety Plays from Hilary Kramer: KFT, TEF, NGG

TOM HUDSON: As stocks have moved lower this month, investors again learn the lessons of diversification and defense. Tonight`s "Street Critique" guest finds safety in food, electricity, and telephones, and some of it oversea. Hilary Kramer back with us, editor at

HUDSON: Hilary, your safety picks here we`re going to talk about, also sport higher dividend yields than most U.S. government bonds these days. We`re going to begin with Dow component Kraft (NYSE: KFT) Food, K-F- T is one of your safety plays. The stock has had a nice rally this spring and has held on to most of it. What fuels it from here?

HILARY KRAMER, EDITOR, GAMECHANGERSTOCKS.COM: Well, Kraft (NYSE: KFT) required Cadbury, the European chocolate-maker. So if Kraft (NYSE: KFT) can take some their Oscar Meyer wieners, and some of the Philadelphia Cream Cheese and Oreos, and uses that distribution network, leverage off of it, you could see Kraft (NYSE: KFT) become even more of an international diversified play. And I`m not so worried about commodity prices. As they moderate, Kraft (NYSE: KFT) is going to do really well. You have a lot of upside and a lot safety in Kraft (NYSE: KFT), K-F-T.

HUDSON: You mentioned international growth being a potential for Kraft (NYSE: KFT). And you do like some international ideas, including the Spanish telecom Telefonica, T-E-F, the ticker symbol. Big dividend yield, 8 percent, the stock has been kind of choppy. And it`s interesting because most of its business is in Latin America, not Sprain, right?

KRAMER: Right. Telefonica, T-E-F, known as Telefonica de Hispana formerly, is totally misunderstood, just because it`s a Spanish-based company doesn`t mean that their debt is a sovereign debt problem with Spain, OK, you know, could be defaulting.

Telefonica operates (INAUDIBLE) in Brazil, they`re across Latin America. No matter how bad the economy is, people are still moving to cell phones. And this is a mobile play, fixed line, data communication, T-E-F. And you can`t go wrong with that dividend. Telefonica is here to stay for a long time, a great stock for your portfolio and for some protection.

HUDSON: You also like a different kind of fixed line, and that being electric utilities. National Grid is your idea here, it operates in the U.K. as well as in New England here in the U.S. A pretty good-looking stock chart, has been dropped off from its recent high lately, but again, another big dividend yield here for this utility.

KRAMER: Right. This -- 6 percent on National Grid, N-G-G. A lot of people haven`t heard of N-G-G because it`s a U.K.-based utility infrastructure play. But they have bought up National Grid via these plum properties, these plum utilities across the United States mainly the Northeast. A very profitable company, growing, but I`m really recommending it for the safety. It`s a great way to be in a utility, but to have geographical diversification so you don`t have regional risk that can happen with bad weather, for example.

HUDSON: Sure. Let`s get to some viewer e-mails asking for some updates. John sent us this note asking about Telvent, it has received a buyout offer. And the stock has appreciated significantly. "Does Hilary recommend selling or holding?"

You first mentioned this back on December 30th, 2009, when it was $38 and change. The buyout offer that it received a few weeks at $40. How about it, do you take it?

KRAMER: Take your money. Take it off the table. Deploy it in other opportunities, especially in this down market here. But it did get acquired, if you went in it, you made -- you eked out a little bit, it`s nice change for yourself.

HUDSON: Are you selling your position in Telvent here?

KRAMER: Yes, yes. And I`m recommended subscribers to newsletter sell and take that $40.

HUDSON: What about the other three safety picks, disclosures, do you own those?

KRAMER: No, I`m just in the process of selling the Telvent.

HUDSON: There we go. You can e-mail us, that address is Of course, we`re online elsewhere on Twitter and on Facebook. More questions next week. Our guest with "Street Critique," it`s Hilary Kramer,

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