Market Mirror

Calvin Baker's portfolio closely tracks the larger market

A maker of pressure-control equipment for oil and gas production supplied lots of power for the portfolio that Calvin H. Baker chose in March of 2007. But while Cameron International Corp. rose 48% for Baker, a managing director and senior portfolio manager at Baltimore-based Brown Capital Management Inc. (No. 5 on the BE ASSET MANAGERS list with $2.71 billion in assets under management), it could not keep the overall portfolio in the black.

His four stock picks slipped 6.8%, just ahead of the performance of the S&P 500 index. But Baker, whose firm chooses stocks based on a 3- to 5-year investment horizon, maintains that all of them are keepers.

With a stock split on Dec. 31 and recently trading in the $42 range, Cameron could hit $50 to $55 within a year and a half, he maintains. Shares of Abbott Laboratories were basically flat, but an expanding array of uses for its arthritis drug Humira should help lift its price to $63 within 18 months, Baker says. “The market just keeps expanding, and the drug is turning out to be a huge success.”

But what about insurer American International Group and handbag-and-accessory retailer Coach Inc., which fell a dizzying 40% and 42%, respectively? Hold on to them, Baker advises. AIG was hurt by exposure to bad mortgage debt, but the main insurance business is sound, and the company has plenty of capital. Within 18 months, AIG could move from a recent close in the $40s to $55, Baker predicts.

Coach has been hurt as consumers have increasingly kept their purses shut. But its depth of products and overseas penetration-especially in Asia-should add up to 20% annual growth over the next several years. It could climb about $4 a share to $35 or more within 18 months, Baker believes.

CALVIN BAKER

  Price Price Total
Company (Ticker) 3/7/07 3/14/08 Return*
Abbott Laboratories (ABT) $51.48 $51.38 -0.2%
American International Group (AIG) 68.39 41.18 -39.8
Cameron International Corp. (CAM) 28.88 42.73 48.0
Coach Inc. (COH) 48.22 28.03 -41.9
Total Portfolio     -6.8
S&P 500 1,391.97 1,288.14 -7.5

Current Value of $4,000 Investment: $3,661.06
*REFLECTS STOCK SPLITS AND DIVIDENDS SOURCE: YAHOO FINANCE

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