The Best Offense Is A Good Defense

Portfolio manager Randall R. Eley keys on value to help weather the market

he adds.

If there is any growth potential among his list, Eley thinks it’s in Philip Morris (NYSE: MO). The portfolio manager says the market has long factored tobacco litigation issues into the company’s stock price. Philip Morris, however, has a generous 4.2% yield and could well generate strong earnings growth in the years ahead. “In a defensive portfolio, it’s my one pick with the greatest offensive potential,” he says. 

Randall R. Eley’s Private Screening Picks

Company
Exchange: Symbol

Price*

12 to 18-month
Price Target

P/E on Projected
2002 Earnings

Est.5-Yr.
Annual EPS
Growth Rate

Why Stock Will Outperform

ChevronTexaco
NYSE: CVX
$87.65 $107 20.3 8.3% While oil is a steady business, the company’s 3.1% yield will provide income.
ExxonMobil
NYSE: XOM
42.91 47 23.1 7.5 Another play on oil’s strength, also providing a solid divident.
Dow Chemical
NYSE: DOW
32.39 50 24.9 10.0 Now that Dow’s Union Carbide merger has turned the corner, expect earnings upside.
General Motors
NYSE: GM
60.71 71 20.0 5.3 Despite a drop-off in auto sales, GM’s 2002 profits could pleasantly surprise Wall Street.
Philip Morris Companies
NYSE: MO
52.67 73 11.6 11.0 Tobacco litigation aside, its shares are cheap, given growth prospects for its other businesses.

*As of March 8, 2002
Sources: Randall R. Eley, The Edgar Lomax Co.; Morningstar INC.; Zacks Investment Research

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