Stephen Coleman, portfolio manager and chief investment officer for St. Louis-based Daedalus Capital, crafted a tech-heavy portfolio for last year’s Private Screening. This portfolio mimicked the fate of Daedalus’ son, Icarus, who flew too close to the sun: Coleman’s September 2000 Private Screening picks collapsed 42.51%. “Our mission is to consistently earn clients at least 20% compound annual return based upon a trailing three-year basis, regardless of the general market,” explains Coleman. Based upon this methodology, Coleman’s clients’ portfolio has returned 38.05%, beating the S&P 500’s three-year trailing yield of 12.25%. Still, Coleman, who doesn’t give 12-month target prices, says that investors who followed last year’s picks can expect to recover over the long haul.
Adobe Systems Inc. (Nasdaq: ADBE), the desktop publishing powerhouse, slid 32.01% since recommendation to $41. Many itchy investors pulled out of the company nine months ago, including Coleman, who sold it at $47 in January, garnering a 14% return. “Even though we sold the stock, we do like their business and their future. We may buy it again.”
Broadcom Corp. (Nasdaq: BRCM), the maker of broadband chips and circuits for top customers like Motorola and Cisco, careened 74.61% to $37.25. “Here’s a company that has been crushed, but I love it. I doubled my clients’ position in it,” says Coleman. The firm has developed a third-party hardware reference platform that will enable digital video recording and home networking capabilities for the Microsoft TV platform.
Corning Inc. (NYSE: GLW) tanked 76.56%. The company recently delayed construction of a new optical fiber manufacturing facility in Oklahoma City, and it is slowing the growth of existing plants. The Street seems to think that $16 is a fair price for this company. Coleman believes that “the market ran the price up and then bailed.” However, he supports Corning, and doubled his position in June for roughly $15 per share. He also believes Lucent (Corning’s second-place rival) “is on life support.”
Delta and Pine Land Co. (NYSE: DLP), the nation’s leading producer of cottonseed, had a 0.70% 12-month yield. Although the company has revolutionized the cotton industry, Coleman sold his position last October for $24 because “the CEO died of cancer and management seemed to be in flux.”
Siebel Systems (Nasdaq: SEBL) slipped 30.08%. Keen stockholders grabbed profits nine months ago. “This is my favorite in the bunch,” raves Coleman, who purchased more of this software application company for $26 in March.