A Rough Spell

For most of last year, Terry Bedford, president of Bedford & Associates Research Group in Hamilton, Ontario, could thank high commodity prices for the success of the five-stock portfolio he assembled (“The Price is Right,” March 2007). But the dismal start of the market in 2008 pushed his portfolio to a decline of 3.7% versus a drop of 1.4% for the S&P 500.

Despite the recent downturn, the biggest winner was Freeport-McMoran Copper & Gold Inc. At one point, its shares more than doubled-closing at $117 by late October. And although shares have fallen back to the $95 range and remain richly priced, Bedford would “buy it all day long” should shares dip into the mid-$80 range. “Commodity prices are booming because the U.S. dollar is declining, and it will continue to decline longer
term,” says Bedford, adding that Freeport could touch $150 over the next 12 months.

Cameco Corp., a uranium provider to nuclear power plants, beat Bedford’s target in June, when it peaked at $56-a 50% gain. Shares have since fallen, but thanks to a groundswell of support for nuclear energy as a clean power alternative, Bedford looks for the stock to hit $60 within a year.

These gains offset three clunkers. Micron Technology Inc., down 54.5%, took its lumps in a price war with SanDisk Corp. over flash memory devices. Getty Images Inc., down 41.8%, suffered as prices for its digital stock images plunged. Bedford would look for opportunities to sell both stocks. Meanwhile, new drugs have been slow to move through the development pipeline at Genetech Inc., down 18.4%. Bedford remains keen on the stock, though: He expects it to touch $120 within 12 months.

Terry Bedford

  Price Price Total
Company (Ticker) 1/5/07 1/8/08 Return*
Cameco Corp. (CCJ) $37.10 $39.74 7.1%
Freeport-McMoran Copper & Gold Inc. (FCX) 50.41 95.37 89.2
Genetech Inc. (DNA) 83.68 68.29 -18.4
Getty Images Inc. (GYI) 43.40 25.25 -41.8
Micron Technology Inc. (MU) 13.58 6.18 -54.5
Total Portfolio     -3.7
S&P 500 1,409.71 1,390.19 -1.4

Current Value of $5,000 Investment: $4,815.91