Topic: Growth Stocks

The Wall Street Stock Forecaster Hotline – Friday, August 24, 2007

Article Excerpt

MOODY’S INC. $46.45, New York symbol MCO, has dropped by a third since the start of June due to the turmoil in the mortgage market. Moody’s charges bond issuers a fee for a credit rating, and the recent problems could hurt investor interest in new debt securities. The company could also face class-action lawsuits from subprime mortgage investors who relied on Moody’s ratings. Politicians will probably call for new controls on rating agencies, which could hurt Moody’s prospects. Our view is Moody’s will overcome these setbacks. But the stock could fall further in the next few weeks. Moody’s is still a hold. THE MCGRAW-HILL COMPANIES, LTD. $50.15, New York symbol MHP, owns rating agency Standard & Poor’s, which accounts for 75% of its profits. So like Moody’s, the stock has moved down lately in the wake of mortgage market turmoil. McGraw-Hill’s other operations, textbooks and media properties should help offset some of Standard & Poor’s problems. But profits at these businesses will remain…