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that this law will expire in 2010.
F. Douglass Lewis Jr., president of FDL Financial Services Inc. in Washington D.C., recommends investors take a look at Cedar Fair (FUN), a Sandusky, Ohio-based operator of amusement and water parks. “The parks have been very profitable, so it’s only a matter of taking the new parks and implementing the successful template,” says Lewis, whose firm manages $35 million in equity. He’s looking for Cedar Fair to grow revenues from $831 million in 2006 to more than $1 billion this year. Trading at $29 and sporting a dividend yield of 6.6%, Lewis is looking for shares to climb by 20%, to $35, in the next 12 to 18 months.

Calvin Baker, senior portfolio manager for Baltimore’s Brown Capital Management (No. 5 on the BE ASSET MANAGERS list with $2.7 billion in assets under management), also likes the stock. He notes that Cedar Fair is structured as a limited partnership, so the principals are interested in the income. In July, the company announced that revenues through the first six months of this year were up 2%, or $3.3 million–reflecting an increase in spending by park visitors, though attendance had dropped slightly.

Investors who enjoy an occasional cocktail may want to consider indulging in Diageo plc (DEO), the world’s largest producer of premium alcoholic drinks. The London-based company owns many of the leading brands including Guinness stout, Johnnie Walker Scotch whiskies, Jose Cuervo tequila, and Smirnoff vodka, among others. Trading around $84 in early July, shares offered a dividend of 2.3%, and Baker expects shares to climb to $95. “Given their dominant position in these key brands and the international markets that they are continuing to focus on,” he says, “they will continue to be the premier dominant company in that drinks/liquor market.”

It’s also Diageo’s growth strategy that appeals to Lewis. “They don’t spend money on research and development,” he says. “They just go and buy the brands they want. Lastly, international growth is really key as they expand into Asia, Africa, and Latin America.”

As a contrarian play, Pfizer (PFE), the New York City-based pharmaceutical titan, caught the eye of several money managers. Demographics are a solid reason why Young says the pharmaceutical industry is a good place to park some of your money. “We are in an aging environment where the majority of our population is rapidly living past 50 years old,” he says, “and just like anything you have owned for 50 years, maintenance starts.”

It’s a contrarian play because Pfizer shares have seen better days. Looming patent expirations, perhaps most notably that of its blockbuster cholesterol drug, Lipitor, in 2010, have weighed heavily on the stock. It’s a critical issue because Lipitor generated nearly $13 billion in sales last year–slightly more than 25% of Pfizer’s total sales. Trading in the $25 range, Young expects shares to climb to $35 in the year ahead.
“[Shares aren’t] going through the roof now, however it’s a good, conservative stock with steady growth and a nice dividend yield of 4.6%,”


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