Besides running the $12.3 billion T. Rowe Price Equity Income Fund, Brian Rogers manages the firm's $509 million Value Fund. Value has returned an annual average 30.8% since its 1994 debut by betting on turnarounds. He chatted with BUSINESS WEEK Senior Writer Robert Barker:
Q: What have you bought lately?
A: U.S. Surgical. The stock fell from about 45 to 25 over the past 18 months; it's about 29 now. The company has a decent balance sheet and a relatively low price-earnings ratio, given that it's in health-care products.
Q: What else?
A: Inco (16), a huge nickel producer. The company's market value is less than what it paid for a big property, Voisey's Bay, in Canada. Obviously, Inco is a bet on nickel prices getting better some day, but in our view, it's an asset play.
Q: What will catch your eye next?
A: I'm most intrigued with figuring out what to do about energy. That's a sector where the Value Fund has not had substantial investments, and the stocks have been killed.
Q: You mean exploration and production companies, or oil-service outfits?
A: Companies with assets in the ground. With the price of the commodity under pressure, the service companies don't look as inexpensive as the companies that actually own the stuff.