Cappiello: Frank's Favorites

11/07/2003 12:00 am EST

Focus:

Frank Cappiello

Chairman and Managing Director, Montgomery Brothers, Cappiello, LLC

Rarely, can you find anyone with more impressive credentials than Frank Cappiello, graduate of Notre Dame and Harvard's Graduate School of Business. The money manager and financial analyst is also president of McCullough, Andrews & Cappiello. Here's his latest favorite stocks.

"We own medium sized electronic and technology stocks but for most investors, we’d suggeset the big ones. For most of you, we think Intel (INTC NASDAQ) still has a good part of a life to live for the next few years, in terms of going up. Microsoft (MSFT NASDAQ) would be my second choice. This is a slam dunk. Sooner or later we will see some action in terms of price out of this stock.

"I have a concentration of medical stocks, because I think over the next couple of years, the drug stocks – particularly big pharma – will come back. Pfizer is a stock that puzzles me. Its got a lot of value. It grows its dividend. It’s hard for me seeing how you can be hurt buying this big giant. To date this stock has done more in terms of dividends than it has in price. That would be one. I also like Amgen (AMGN NASDAQ). Anthem (ATH NYSE) is an HMO. Not as big as the others, but coming along. I think HMOs have a place in the medical story. Zimmer (ZMH NYSE) makes medical parts – replacement parts. As we grow older, we are going to need more replacement parts, and that’s happening today.

"We also like United Parcel Service (UPS NYSE). As the economy grows, we’re going to be shipping more and more stuff around, and FedEx has been breaking some barriers on the upside, and I think UPS will follow. An IPO of last year, which has been spectacular, is Dick's Sporting Goods (DKS NYSE), which I still think has a ways to good. It’s a good long-term growth stock in terms of retailing. Regis (RGS NYSE) has been buying up hair salons – both for men and women. They’ve done a very good job of consolidating them. We all need haircuts. It’s a good stock as inflation protection and even better as recession protection.

"In the financial area, Chubb (CB NYSE) is an insurance company that is improving. A small company - highly speculative but offering the potential for high gain - is company is VaxGen (VXGN NASDAQ). This company has just been awarded a contract for an anthrax vaccine, and could be an interesting speculation.Tribune Co. (TRB NYSE) is my media play. And Choice Hotels (CHH NYSE). This is my only real estate stock. But I like the hotel sector at this juncture."

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