REFLECTING on the stock market recently, I decided that it resembles the late stages of an all-night poker game.
There’s a lot of money on the table, even as some people have pocketed their profits and gone home. And while there are a lot of cards showing on the table, the best players are keeping their trump cards hidden.
Or they were, that is, until charity came calling and asked them to show their hands. For the good of a good cause, supporting children with cancer, some of Wall Street’s smartest players disclosed their top picks at a philanthropic investment conference that raised $350,000 for Tomorrow’s Children’s Fund.
Michael Price, who was making a repeat performance at the charity event – last year, he picked General Motors, which has since posted a 19 percent gain – said he still thinks the automobile maker represents good value. But his top picks at this time are property/casualty insurance company CNA Financial, Investor AB, Suburban Lodges and Project Software.
Price’s methodology has not changed one iota in the past year, even as growth stocks have continued to outperform his favored value stocks. The famed mutual fund manager says he looks for stocks that are being ignored by Wall Street but have strong management and good business models.
Like other value managers, Price admits he is looking into small-cap stocks to find true bargains. Though Price did not offer any more names, another value-oriented manager,
Another strategy to find good stocks is to look for ignored companies in an otherwise hot sector. Take, for example, entertainment, suggested Mitch Julis, the managing partner of Canyon Partners.
His favorite stocks in that sector include MGM, Hollywood Entertainment, Loews Cineplex and Trans World Entertainment.
“MGM is the only pure content play in entertainment,” he said. “There’s been a management shake-up, and I think they’re going to strike a deal with Liberty Media to get access to eyeballs. MGM needs a distributor for its content.”
Seth Glickenhaus, chief investment officer of Glickenhaus & Co., also looks for ignored stocks in a well-watched sector, in his case, financial services.
“Countrywide Credit is a remarkable financial services stock and very under-priced,” he said. “It is the dominant company in the mortgage field and has reported 14 successive up quarters.”