M100 Top Picks

06/13/2003 12:00 am EST

Focus:

Ken Kam

CEO, Marketocracy, Inc.

Marketocracy is an online site that allows individuals to operate virtual mutual funds. The m100 members are the top performers. Based in part of their stock selections, Ken Kam operates a top-performing mutual fund, the Marketocracy m100 Fund . Says Ken, "Many of the m100's holdings are stocks that have been overlooked by professionals." Here are the top picks of four of the m100, who were invited to The Las Vegas Money Show by Marketocracy to share their favorite stock picks.

Danny Chabino : I like Ultimate Electronics (ULTE NASDAQ). I think the company is well positioned to take advantage of the market in consumer electronics. They have sales people who are very capable of moving customers from low end models to the higher end, higher margin products. This type of sales team coupled with the merchandising effort leads me to believe that the company can be very successful. I also like Carmax (KMX NYSE). The company is good at finding the price points that are hot and then filling those price points with the right cars. This strategy adds up to a successful sales cycle and makes this another attractive company to own.

Ian St. Martin: I like Ceradyne (CRDN NASDAQ). The company makes plastics, bullet-proof materials, orthodontics, diesel engine parts, aerospace equipment for the military, and casings for fuel cells among other things. Until the last several months, the company has been more a scientific outfit than profit hungry business. However, that all changed when they fired their CFO and added one that was far more interested in earnings. I like the path this company is on now. I also like American Home Mortgage (AHMH NASDAQ). People are worried about a collapse in mortgage refinancing, but this company has set itself up to profit even when refinancings do taper off.

Art Ebert: Hospitality Properties (HPT NYSE) follows my strategy of getting into companies that have had bad news recently. This company owns buildings for hotels, so there is a steady income stream there. It has over a 10% dividend yield as well. However, recently Wyndham said that traffic was down and that it would have to default on a couple of leases. I think that this isn't as big a piece of bad news as the market has treated it to be, and though the company could still fall, I see $25 as a buying opportunity. Another pick of mine is Allied Capital (ALD NYSE). This company loans money to small- and medium-sized companies, even taking an equity stake at times. It offers a 12% dividend yield as well. The risks of this one seem to lie in the large short-interest that has accumulated. Still, this one is a very large holding for me, and I buy on dips that reach $20 per share.

Michael Vargas: I've been buying International Gaming Technologies (IGT NYSE) and Williams (WMS NYSE), both of which are capitalizing on the Indian gaming boom. I also own a number of REITs, and recently came across EPR. This company specializes in movie theaters. Now movie theaters are usually a money loser, but the growth of the number these theaters is big, and this company seems to be able to find and buy only the money makers."

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