October 1, 2003
Turning Market Pain Into Prosperity
Last year, when we spoke to Louis A. Holland, managing partner and CIO of Holland Capital Management L.P., like most money managers, he was hunkering down as the bear market raged on. “Markets tend to go through three phases — love, hate, and indifference,” he said, adding that he thought we had “passed into the hate stage and could have some more (volatility) to go through.”
The market’s hate stage has turned to love for Holland. He expected the equity markets to provide a better performance in 2003, and he was right. In fact, his focus on finding companies that sold at a cheap price but still had good earnings growth provided spectacular results: his Private Screening selections rocketed to a 29.80% gain during the 52-week period from July 12, 2002 to July 11, 2003. By comparison, the Standard & Poor’s 500 index tallied an 8.33% gain and the Dow Jones industrial average was up 5.01% during the same period.
Each of Holland’s selections managed to gain more than 7%, with one stock, Zebra Technologies (Nasdaq: ZBRA), climbing an astounding 72.10%. The stock price of this bar-code scanner manufacturer zoomed from $47.67 to $82.04, propelled mostly by its ability to aid in homeland security measures.
Republic Services (NYSE: RSG), a waste management firm, managed to turn garbage to gold with an impressive 32.22% increase. The stock rose from $18.22 to $24.09 per share, staying well ahead of its 12% annual growth rate.
Carnival (NYSE: CCL), the well-known cruise operator that Holland selected, sailed to an 18.36% increase, overcoming the negative news about on-board viruses that plagued ocean liners earlier this year. The stock moved from $27.13 to $32.11 per share.
International Speedway (Nasdaq: ISCA), the small operator of auto racing tracks, didn’t quite live up to Wall Street expectations but did manage a 7.09% gain, going from $37.68 to $40.35 per share. With auto racing still growing in popularity, its prospects for growth are still good.
And Wall Street powerhouse Goldman Sachs Group (NYSE: GS) showed signs of life, jumping to a 19.23% increase, fueled mainly by baby boomers looking to sock away retirement funds. The stock grew from $73.02 to $87.06.