Finding Value in Mega-Caps

Matrix Advisors Value's decision to load up on undervalued giants is finally paying off.

The long-awaited revival of mega-caps -- stocks with gargantuan market values -- is finally here, and Matrix Advisors Value is reaping the benefits. The fund, which has traditionally focused on the stocks of large, undervalued companies, is now stuffed with such behemoths as American International Group, Citigroup, General Electric, Microsoft and Wal-Mart Stores (all among the fund's ten biggest holdings).

Manager David Katz is a bargain hunter. He and two colleagues seek out stocks that sell for at least one-third less than their assessment of the underlying company's intrinsic value. The search for deep discounts often leads to companies with real or perceived short-term problems, so Katz wants companies that are financially strong.

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Elizabeth Leary
Contributing Editor, Kiplinger's Personal Finance
Elizabeth Leary (née Ody) first joined Kiplinger in 2006 as a reporter, and has held various positions on staff and as a contributor in the years since. Her writing has also appeared in Barron's, BloombergBusinessweek, The Washington Post and other outlets.