November 14, 2006: Stock and Bond tip

Thank you for the wonderful e-mails regarding the previous WW2 posts. Russell 120 was a very astute observer of the history surrounding the development of the weapon system, and I thank him for his commentary.

I am trying to construct a direction for selected stocks between now and February. Honestly, I am reluctant to recommend any major portfolio changes, except to advise readers to lighten up pharma and oils, and probably metals as well. I will have a plan to share in a few days.

Here is what I recommend today:

Bond: Yes, I am "serious".....buy the 9.62% Sirius bond maturing 03/01/2033 and callable beginning in 2007 at 104.and change. The cusip is 829666AK9. I purchased some last Thursday at approximately 98/bond. Interest accrues semi-annually. Sirius is a viable company with good leadership. Although the bond is rated junk, I see excellent things ahead for Sirius and very little threat of nonpayment.Potential nice capital appreciation and a great yield while you wait.

Stock: Bristow Group, Inc. (BRS) trading at about 33. Bristow has been trending sideways to down over the past months. This company is one of the largest providers of helicopter transportation in the oil and gas industry. Growth has been driven worldwide through increased exploration and development activity. THIS STOCK THRIVES ON BAD WEATHER emergency contracts at a large markup. The majority of the fleet works in the U.S., however expansion plans are focused on larger aircraft that are well suited to support increasing deepwater activity. While a recession-driven decline in oil and gas demand would affect earnings, the company has below-average leverage relative to peers and a string balance sheet to cushion it against any decline. I say that this stock may reach 43/share in the coming year. It is risky to bet on any oil and gas plays now, but, BRS could be your holding in that area. It is a safe bet, in my view with little downside and strong upside over the long term.