Why Polaroid May Click Again

Polaroid is the quintessential growth stock -- of the '60S. In the 90's, however, a string of new products has failed to restore much luster to this once-hot company, and while the market sizzled in '91, Polaroid's shares went nowhere. But one growth-stock picker, Arthur Bonnel Jr., thinks the quick-photo giant is poised for a return to the hot old days.

Bonnel runs MIM Stock Appreciation Fund, which soared a phenomenal 77% in 1991 on holdings in a diverse assortment of mainly small companues. The fund took profits early in the year and was 70% in cash by March. But Bonnel has been buying of late, and his No. 1 stock pick has been Polaroid, which now constitutes his largest holding.

To begin with, Bonnel notes, Polaroid has shed much of the debt that has encumbered it in recent years. Last year, Polaroid received $925 million from Eastman Kodak to settle an antitrust suit, and the company has been using much of the proceeds to retire bank debt and high-cost preferred stock. With its balance sheet spruced up, Bonnel argues, Polaroid is ready to rebound. He sees growth in two major areas: its new compact camera, Joshua, which is being introduced in Europe and Helios, a digital-imaging system for medical diagnostics. Brokeragehouse analysts are predicting a substantial rise in earnings, to $2.70 a share in '93 vs. $2.25 this year. Bonnel is even more boyant: He sees the stock rising from a recent 31 1/2 to the mid-40s by this time next year.

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