Rebound Or Relapse?

By Matthew S. Scott

participation in the Internet business. The current price of the company fairly captures the value of the media and entertainment assets.”
MARY PUGH, Pugh Capital Management

Bond Coupon Maturity
Ginnie Mae 5.5% 2033
Comcast 8.38 2013
Ford 7.25 2011
SOURCE: MARY PUGH

Ginnie Mae: “Basically, the mortgages represent a very high-quality sector of all the securities. [I chose] Ginnie Mae mortgaged-backed [securities] for both the attractive yields that they have provided, and also the government guarantee and the monthly cash flow.”

Comcast: “The cable sector is one that we see as having improving credit fundamentals. We’re picking Comcast because they have an incredible franchise in their cable assets, a strong management team, [and] improving credit.”

Ford: “Ford is challenged by a non-competitive cost structure, declining market share, and it operates within an industry that has global excess capacity so it’s not necessarily a beautiful picture. Having said those negative things, we actually think that you are well compensated for those risks. It is an investment grade credit.”

RAYMOND STEWART, Rasara Strategies

Stock (Exchange: Ticker)

Price at
Recommendation

12-Month
Price Target

Popular Co. Inc. (Nasdaq: BPOP)

$37.10

$46.00

Sovereign Bancorp Inc. (NYSE: SOV)

18.23

21.00

Marshall & Ilsley Corp. (NYSE: MI)

31.07

36.00

*AUGUST 19, 2003 SOURCE: ZACKS.COM; RAYMOND STEWART

Popular Co.: “My first pick is formerly known as Banco Popular. It’s a $36 billion banking company serving the United States, Puerto Rico, and parts of the Caribbean. Earnings have tended to grow at this company around 14% per annum over the past five years.”

Sovereign Bancorp: “[It has] 19 operations in Pennsylvania, New Jersey, and various parts of New England. It doesn’t pay much of a dividend [but] it has been growing earnings at around 12% per annum over the past several years. It could also end up as a merger or consolidation target.”

Marshall & Ilsley: “[It is] a diversified financial services company with operations in commercial banking, trust and investment management, and data processing. I’m looking for the stock to trade in the $36 target range in the next six to 12 months.”

October 2002 B.E. Stock Update
Last October’s roundtable participants demonstrated that they can pick stocks with the best of them. Our stock pickers — Clark Grain of Zenith Investment Club, Marcus Plump of Millionaires-Thru-Christ Investment Club, Okorie Ramsey of Awareness to Action Investments, Bernadette Johnson of Black Women Investment Corp., and Baunita Greer of the NAIC New York Chapter — were all representatives of leading investment clubs. The leader of the pack was Johnson with picks that produced a whopping 36.78%. Grain, on the other hand, trailed his peers with an abysmal portfolio return of -9.13%.

Zenith Investment Club
Company (Exchange: Ticker) Recent Price* Price at
Recommendation†
Total Return Current Value
of $1,000 Investment
Automatic Data Processing (NYSE: ADP) $37.19 $34.75 7.02% $1,070.22
Freddie Mac (NYSE: FRE) 48.30 61.01 –20.83 791.67
Fannie Mae (NYSE: FNM) 63.09 73.01 –13.59 864.13
Portf
olio Performance
–9.13%
Current Value of $3,000 Investment $2,726.02
Millionaires-Thru-Christ

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