Where to Invest -- The Pros
Where the Buys Are
The experts give us their best ideas
When the stock market was soaring, it seemed like everyone--from taxi drivers to Wall Street gurus--was a winner. Over the past year, though, making money was no small feat. So kudos to two of the four participants in BUSINESS WEEK's annual stock-picking contest who managed to earn impressive gains on hypothetical $100,000 portfolios invested in 10 stocks.
Michael H. Winer, manager of the Third Avenue Real Estate Value Fund, rode a turnaround in long-neglected real estate stocks to a 24% gain. Catellus Development (CDX), Forest City Enterprises (FCEA), and Echelon International (EIN) rose over 40% each, while only one of his picks fell.
The aptly named Eugene A. Profit finished next with a 21.2% gain. The manager of the Profit Value Fund did well with investments including Merrill Lynch (MER), Merck (MRK), and Berkshire Hathaway (BRK). Profit's biggest hit was Elan Corp. (ELN), whose stock rose 91.7%, benefiting from this year's rise in biotech shares.
Our other two contestants didn't fare so well. Mary Lisanti, manager of the Pilgrim Small-Cap Opportunities Fund, posted a 16.4% decline. Of course, small-cap growth stocks--her specialty--were out of favor. Biotech company Abgenix Inc. (ABGX) and drugmaker King Pharmaceuticals Inc. (KG), soared 261% and 42%, respectively. Declines in seven of the other eight dragged returns down.
Last place went to Sevgi Ipek, manager of the socially responsible Citizens Global Equity Fund. Heavily exposed to two lagging investment themes--technology and international--Ipek's portfolio lost 27.4%. Only three stocks, including tech star JDS Uniphase Inc. (JDSU), finished in the black. Good luck to this year's contestants.By Anne Tergesen