When Zurich Insurance bought Kemper, a Chicago financial-services outfit, last January, Kemper COO Steve Timbers expected the buyers to impose a defensive posture. But they didn't. "Zurich bought us for what we were--including our investment style," he says. "The way to win is to combine value and growth strategies."
Timbers, now president of Zurich Kemper Investments, is high on three stocks: Paging Network, Marriott International, and MBIA. All of them have strong finances, fast-growing earnings, and low price-earnings ratios.
Dominant in wireless communications, Paging Network (PAGE) has expanded fast. Yet its stock, at 21, trades at a depressed p-e despite its 50% growth rate. Timbers expects Paging's VoiceNow to be a blockbuster. VoiceNow uses common pager and cellular technology to create a portable answering machine.
Marriott (MAR) is benefiting from the lack of new hotel building and the cyclical upturn in bookings, says Timbers. One of Marriott's assets with huge potential is its Senior Living Services unit, which caters to retired people. Marriott plans to expand this unit into a larger home health-care operation and possibly spin it off or take it public.
MBIA (MBI) is the leader in municipal-bond insurance. Timbers thinks the pace of bond offerings will rise--after two slow years. He notes that MBIA has "superior franchise, balance sheet, and management." At 74, the shares are "unbelievably cheap," he says, based on estimated earnings of $7.10 a share in 1996 and $7.80 next year.