The Long And Short Of It

Money manager Bob Olstein, who runs the $150 million Olstein Financial Alert Fund, has racked up impressive gains since Oct. 17, 1995, the day the fund opened for business. One of his picks, Wet Seal, has jumped 368% since then. A stock he shorted, Boston Chicken, has tumbled 32%. What's Olstein up to now?

Stocks he is buying are a bet on baby boomers' coming retirement: Coachmen Industries (COA), a maker of recreational vehicles and modular housing; Fleetwood Enterprises (FLE), with 20% of the manufactured-housing market; and Thor Industries (THO), a maker of motor homes. Other reasons Olstein likes these companies: All have ample cash flow and little debt. They are also selling at a discount, partly because their shares have been beaten down.

Topping Olstein's list of stocks to short are Best Buy (BBY) and Cooper Cameron (RON). Best Buy sells consumer electronics products, appliances, and software--through a chain of 200 superstores. "The company is flirting dangerously with violating its loan covenants," says Olstein. He warns that the company is in a low-margin business and any disappointments could create a financial crisis. The company says it will meet its loan covenants.

Cooper Cameron, which makes oil-patch gear, is overpriced--in view of its negative cash flow and the "aggressive accounting" it uses, says Olstein. Cooper recognizes revenues before billing a customer, "based on an estimate of the percentage of completion of a project," Olstein explains. So the company's growth may not be as strong as it looks. Cameron spokesman Scott Amann disagrees: The company's accounting practices are widely used in the industry, employing an accepted principle approved by auditors Ernst & Young, he says. And based on net income, noncash charges, and depreciation, Cameron generates positive cash flow, he adds.

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