Charles N. Jordan Jr. likes to think big. In fact, the 19-year veteran selected his five large-cap stock picks from what he believes are the “56 good ones out there.”
Jordan, 52, is president and CEO of Jordan Advisory Corp., a $105 million fee-based money management firm that manages fixed-income and equity portfolios. His portfolio usually allocates 20% to 25% of its assets in one sector. He maintains a universe of 45 to 60 stocks.
In this Private Screening, Jordan derived his picks from growth companies with more than $1 billion in capitalization. He uses a computer model to establish GARP, or growth at a reasonable price to make stock picks. He maintains: “GARP is a way of identifying those stocks that have value-like characteristics, that is, they’re undervalued, but eventually, they graduate to a growth stock.”
One of Jordan’s top picks is Cisco Systems (Nasdaq: CSCO). He favors the technology bellwether because its earnings usually exceed analysts’ projections. Its revenues rose 55% for the company, for the fiscal year ending July 29.
His next selection is PE Biosystems Corp.-PE Biosystems Group (NYSE: PEB). Formerly Perkin-Elmer, the company was recapitalized when it sold its analytical instruments business, split into two public companies, and focused on biosystems products. Revenues are expected to jump 20% in 2001 to $1.7 billion with a strong focus on their DNA analyzer and other new gene-expression products. Says Jordan: “The stodgy Connecticut-based company generically got into a lot of high-tech products and I think it could be a dominant player.” Most recently, their stock price jumped from $83 to $101, a 21.68% jump from May to July.
Despite its current woes, Jordan still likes Intel (Nasdaq: INTC).In recent months, the chipmaker has taken a hit, but in the first quarter, revenues rose 13% to $7.99 billion. Jordan believes management will “involve itself with more strategic acquisitions,” within the semiconductor sector as well as “prune down some of its nonprofitable product line.”
Another company that has switched sectors is Citigroup (NYSE: C). A classic banking stock, it dropped below $50 in March, but has made a significant rebound. In early August, the stock traded at $71 per share. “This company has gone through the transition of melding several different corporate cultures,” Jordan says. “It looks as though the Traveler’s [Group]/Smith Barney culture has prevailed.” Jordan estimates that this stock will hit $80 over the next year.
Finally, Corning Inc. (NYSE: GLW), the telecommunications and information display corporation, has done a complete about-face, and is positioned to soar. “What a story! You’ve gone from pots and pans to a high-tech company,” he says. Most notably, Jordan sees the potential for a stock split soon, to bring its August 10 price of $272 a share back down to Earth.
Jordan continues to hold large cappers for the long haul. In fact, General Electric (NYSE: GE) and General Mills (NYSE: GIS), so-called Old Economy players with staying power, will remain perched on the top of his list. Does the rest of the large-cap growth industry hold the