Hot stockbrokers share their hottest picks; direct from the experts to you: free advice on investment strategies and buy-now stocks - Hot Investment Strategies - Cover Story

Black Enterprise, April, 1994 by Carolyn M. Brown, Frank McCoy

DANIELS: Politics also is going to play a significant part in where we invest. President Clinton is beginning to flex his muscles in areas such as the information highway. He's pushing health care reform. That's why if you're investing in HMOs, (health maintenance organizations) you'll probably benefit.

BLACK ENTERPRISE: What about individuals who have already invested in pharmaceutical and other other health-related companies?

DANIELS: Probably one of the best choices is in the generic drug market. There are pharmaceutical companies that are poised to take advantage of the generic market. If you're afraid of Clinton's health care plan but you want to make money, look at generic drugs. As the population begins to age, the demand for drugs is going to increase. Most people will buy generic drugs as opposed to the brand-name drugs.

NEAL: Look at a company called Paco Pharmaceutical Services Inc., which pays about 4.4% dividends. It's not a gogo stock, but it's a company that has a solid earnings base clientele. It's a contract packager. The stock has moved in price and it's well valued. It's inexpensive, priced at $10 a share.

SANDERS: Mylan Laboratories Inc. is a generic drug company I like. There is a drug coming off patent, called Tagamet, which is owned by Smith Kline Beecham Corp. right now. Mylan is supposed to done Tagamet in '94 or '95.

ALEX MIDDLETON: I'd like to add to this point about the aging population. You should also look at nursing homes, such as Beverly Enterprises.

SANDERS: As America continues "graying" and baby boomers age, nursing homes, drug companies and health-related companies should prove profitable.

BLACK ENTERPRISE: So far, we've concentrated on some of your favorite sectors. Now let's talk about what industries or particular companies you would avoid.

COLBERT: Avoid the oil industry, especially integrated domestic oils, from a pricing standpoint. You probably will continue to see prices declining in 1994.

SANDERS: Stay away from the precious metals or gold market. Despite low inflation, this sector had one of the best runs in '93. Why? Some believe it was because people in China were buying gold like crazy as a hedge against inflation. But now the Chinese government is tightening economic controls and credit, which should slow the tide of inflation. So, gold might not be as great a play in '94 as it was in '93.

BLACK ENTERPRISE: Provide our readers with some specific stock picks and why you think they will be stellar performers?

CLANTON: For those who like to rock and roll, riverboat gambling has grown very big in the state of Illinois. I like one of the casinos called the Alton Belle Casino, which is owned by Argosy Gaming Corp.; it currently is trading over the counter at $19.

Another stock that is a good value play is S&K Famous Brands Inc. It's an outlet chain that sells designer suits at a discount. You will find S&K in a lot of malls. This company was hit hard in December - earnings were down. But I expect it to rebound soon. The stock is currently trading at $13 but it could reach $19 or more in the next six months.