Trading is not a game of exacts. Perfectionists need not apply. Markets are made up of many irration...
02/07/2003 12:00 am EST
Here we offer a potpourri of brief investment insights, including a favorite fund from Jim Lowell, top buyback candidates from David Fried, the market outlook from Joe Battipaglia, a gold stock buy from Leo Fasciocco, a play on fuel cells from Roger Conrad, and a bet on Buffett from Stephen Leeb. (For more information on the advisors cited, simply click on their photos below.)
"I think the wind is shifting," says Jim Lowell, editor of the Fidelity Investor, a leading mutual fund service devoted to Fidelity funds. "Fundamentals are improving, albeit at a snail's pace. In our aggressive growth portfolio we are adding to our position in Fidelity Leveraged Company Stock (FLVCX). The fund is in the able hands of manager Dave Glancy. The fund is a mid-cap blend with three main areas of emphasis: consumer discretionary names, cash, financials (favoring insurance companies), and telecom."
David Fried, editor of The Buyback Letter, updates his "stock pickers" portfolio. "If you do not own OfficeMax (OMX NYSE) you should purchase it at the current quote of $4.70. It offers excellent value and limited downside anywhere under $5.00 a share. We are adding 200 shares of Activision (ATVI NASDAQ) to the Stock-Pickers portfolio at market prices. Activision announced an aggressive repurchase late last year. In addition there has been substantial insider buying and the company has about $7.50 a share in cash."
"The anticipation and anxiety felt by investors and the public at large is approaching a level similar to that during the 1991 Persian Gulf War," says Joe Battipaglia of Ryan, Beck & Co. "In our judgment, the various asset classes have already discounted much of the risk of war and we believe that potential positive surprises resulting from a short-lived and successful war far outweigh the downside risks. The removal of the war threat should also reduce the required risk premium for equities and improve the value of this asset class relative to Treasuries, money market, and other 'safe' asset classes. Should we be correct about our outlook for the economy and earnings, and should the 'war discount' pass more quickly than expected, this would ultimately translate into a 25%-35% improvement in value for the S&P 500."
"Ashanti Goldfields Ltd. (ASL NYSE) operates mines in Ghana, Guinea, Tanzania, and Zimbabwe; its Obuasi mine has produced gold for over 100 years and is still a leading producer," notes Leo Fasciocco, editor of Ticker Tape Digest. "The company has about 26 million ounces of gold in proven and probable reserves. Technically, the stock has broken out from a 7-week flat base with good tape action. We view this as a trading play; it is a low-priced, speculative stock, suitable only for aggressive investors. We are calling for ASL to advance to around 9; a protective stop can be placed near 5.70."
"Ballard Power (BLDP NASDAQ) remains the best pure play on fuel cells," says Roger Conrad, editor of The Utility Forecaster. "The company claims to have the cash backing it needs until 2007 to bring its multi-product line to market in autos, distributed power generation, and electronics. But with Wall Street and the oil industry all expecting a steep drop in oil prices, few investors are interested. I continue to hold the stock for its long-run promise, but I'm also prepared to stomach further drops in the meantime."
"Our perennial all-weather favorite value and growth stock is Berkshire Hathaway (BRK.B NYSE)," says Stephen Leeb, editor of Personal Finance . "The stock's relatively small premium to book value in the face of sustainable profit growth of about 15% is a powerful argument. Another is the company's unmatched capital base in an industry in which money translates into returns. Then, there is Warren Buffett's legendary investment record, which is getting no credit in the current value of the stock. Remember, too, that well-situated insurance companies are natural hedges in a tough stock market. The shares are a must for all investors; buy up to $2,650."
The key risk-on and off drivers today are the same – U.S. politics, global growth, other centr...