Briefly Speaking ...
09/12/2003 12:00 am EST
Joe Battipaglia shares his market outlook, while Dan Wiener interviews a Vanguard fund manager. John Bollinger and Bill Donoghue offer their picks among ETFs, while David Fried selects his favorites from among companies buying back their own shares.
"The central theme of improving economics is now joined by: 1) reversal in the dollar, 2) a stabilizing of bond yields, and 3) oil prices gradually drifting lower," notes Joe Battipaglia, chief investment officer for Ryan, Beck & Co. "One by one these 'straw dogs' appear to be falling by the wayside and more pieces are falling in place as the economy accelerates out of recession. We believe that many stocks have the ability to move higher over the next several months. We continue to believe that equities will outperform bonds and that small-to-mid cap stocks will provide leadership. The S&P 500 is now at the lower end of our 1,000-1,350 'fair value' range."
Ed Antoian is a co-manager at Vanguard's Explorer Fund. In an interview with Dan Wiener, editor of The Independent Adviser for Vanguard Investors, Antoian discusses a lesser known TV play: "Gray Television (GTN NYSE) has some 40 TV stations in smaller markets. They have an unbelievable management team. They have grown earnings through cost reductions. For instance, you only have to produce news once if you own two stations in a market. The multiple at this company is around 13 times free cash flow, which makes it the cheapest stock compared to all its competitors. We think it should sell for 20 times free cash flow. It's worth $18."
"Small- and mid-cap stocks remain the place to be," says John Bollinger, editor of Capital Growth Letter. "Don't get caught up in this early September bull fever. September does start out strong on average, but September and October have terrible records in the third and fourth years of the Presidential cycle and we are in the fourth year of that cycle. The leaders remain a mix of early and late cycle sectors, tech and transportation, with telecom remaining strong. The current allocations are 50% US stocks and 50% cash, and our current positions include iShares Russell 2000 (IWO ASE), iShares Russell 2000 Growth (IWM ASE), and iShares S&P 600 (IJS ASE)."
"For the savvy investor, proactive money management is alive and passive buy-and-hold investment is dead," says William Donoghue in an article written for CBS MarketWatch.com. "Concentrate on buying long on hot sectors and selling cold sectors short and you could profit in both bull and bear markets. The hottest sector exchange-traded funds are the Goldman Sachs Semiconductor (IGW ASE), MSCI Japan (EWJ ASE), Russell 2000 Growth (IWO ASE), and Dow Jones US Technology (IYW ASE). The coldest ETFs--which should be sold short--are the Dow Jones US Healthcare (IYH ASE), the Dow Jones US Telecommunications (IYZ ASE), Dow Jones US Utilities (IDU ASE), and the Dow Jones US Consumer Non-Cyclical (IYK ASE)."
The premium portfolio at The Buyback Letter is beating the S&P 500 by over 118% since its inception in August 2000. The portfolio, up 88% since inception vs. a 29% decline in the S&P 500 over the same time frame, is managed by buyback authority David Fried . Here are the latest three additions to the portfolio, bought in equal amounts: Health Net (HNT NYSE), which administers the delivery of managed healthcare services; Universal (UVV NYSE), an independent leaf tobacco merchant; and Knight/Trimark Group (NITE NASDAQ), a market maker in NASDAQ and Third Market equities."