Value Added
Star Managers Pick Stocks
By Steven Goldberg, Contributing Columnist, Kiplinger.com
January 15, 2002
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All those managers are under contract by the Enterprise funds to manage more than $700 billion in assets. Each manager was asked to name his three favorite stocks and shed light on the direction of the markets in 2002.
The consensus view of the managers is for a 10% rise in the market this year, slightly higher Treasury bond yields by year's end, a 2.5% federal funds rate, and inflation at a tame 2%.
Their favorite sectors are health care, financials and energy. They predict that lagging sectors will be consumer staples, utilities and telecommunications.
Favorite stocks
Ron Canakaris. A manager with Montag & Caldwell, Canakaris likes Amgen (EDS), saying the technology firm will have strong sales and earnings and is still undervalued.
Glen Bickerstaff. The manager of TCW Galileo Select Equity, who is one of the most consistently successful growth managers, sees Progressive (PGR) as an underappreciated direct marketer of insurance with superior earnings power. He also likes Amgen's current and future product lineup and predicts "continued dominance" for Microsoft (MSFT). (For more on Bickerstaff, see "Head of the Class.")
Mario Gabelli. His best-known fund is Gabelli Asset, and he says Cablevision (CVC) is worth at least double its current price. He calls Liberty Media (LMC), a huge provider of television programming, "very cheap." His third pick is high-yielding Southwest Gas (SWX), which he says is a takeover candidate.
Tom Marsico. The former Janus star who now runs the funds that bear his name is bullish on Tenet Healthcare (THC), the huge hospital chain, which he says has improving margins. He also sees improving margins for jeweler Tiffany (TIF), and he thinks Citigroup (C) is undervalued and will grow rapidly.