Keep Your Eye On This Odd Mix

Diana Corp. is one of the more obscure companies on the Big Board. Some 90% of its $250 million in sales comes from the distribution of beef, pork, poultry, seafood, and cheese to restaurants and retail outlets in the southeastern U.S. That's hardly the sort of business to get investors' adrenalin going.

The other 10% is what's really intriguing. That comes from its C&L Communications unit, the major U.S. distributor for Newbridge Networks and Mitel, two of the hottest companies in telecommunications equipment. C&L, which dishes up 66% of Diana's profits, also hopes to cash in on the newly deregulated markets abroad. Richard Y. Fisher, Diana's chairman, estimates that telecom revenues will grow at the 25%-to-30% rate vs. 9% for what he calls "the protein business."

Doron Gahtan of Gahtan Capital Management in Toronto thinks Diana, at 7 1/4, is an easy double. Diana has $2.65 a share in cash, and tax-loss carryforwards of $2.50 per share. Says Gahtan: "With the market so high, I want to own stocks that also have some downside protection."

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