Mutual Fund Managers Select Stocks
If you’re looking for a few hints on where to find value in a tricky stock market, five mutual fund managers have some suggestions, courtesy of the Mutual Fund News Service.
Shelby Davis, manager of New York Venture, favors Morgan Stanley, the stalwart of investment banking. Earnings per share should double to $10 in three years, based on the bank’s global reach and topnotch work force. Friday close: $68.
At Enterprise Small Capital Fund, Kenneth Fisher picked Furon, a maker of engineered plastics. A major reorganization should push the company past its uneven track record, he said, and lift earnings from $1.20 per share this year to $2.10 next year. Also, there is very little debt. Friday close: 19.12.
Exide Corp., the battery maker, gets a jump from Ron Ognar at Strong Growth Fund. The company has expanded its market share to 30 percent, with the likely outcome earnings will double to $4.10 per share in 1996. Friday close: $44.25.
Anthony Orphanos at Warburg Pincus Growth and Income is a fan of banks, particularly BankAmerica. The market is overestimating exposure to derivatives and erosion of interest spreads, he says. Friday close: $47.38.
For chicken lovers, how about Hudson Foods, which processes birds for such fast-growing restaurant chains as Boston Chicken and Burger King. Jim Haynie of the Colonial Small Stock Fund thinks the stock is a low-risk way to their expansion. Earnings per share are expected to climb from $1.62 to $2.25 in 1996. Friday close: $27.62.
State settles phone suit
The owner of two defunct long-distance telephone companies that left 2,500 Washington customers without service has settled a lawsuit brought by the state Attorney General’s office.
Timothy Wetherald signed the agreement last week. He is the owner of GTI Telecommunicaions Inc. and Genesis Telecommunications Inc., which were based in Federal Way.
According to the agreement, Wetherald must comply with specified restrictions if he wants to re-establish a telecommunications business in Washington. It also requires that he notify any future employer or associate in telecommunications of those restrictions.
“Our research indicates Mr. Wetherald has a string of failed businesses,” said Attorney General Christine Gregoire. “He has the formula: inadequate operating capital and fees that failed to cover the cost of service.”
Wetherald’s background includes bankruptcies of two other telecommunications businesses in Oregon.
Wetherald, who resides now in Colorado, also had a majority ownership in Intranet Communications Inc., based in Bellevue, which filed bankruptcy in March 1993.
A separate settlement agreement limits the activities former business associates of Wetherald also since moved to Colorado.
If Wetherald fails to comply with the terms of the settlement agreement, which was filed in King County Superior Court, $200,000 in suspended civil penalties may be reinstated.
Index derails Morrison Knudsen
Electro Scientific Industries Inc. of Portland has replaced troubled Morrison Knudsen in the Northwest 50 Index.
Composite Research & Management, a subsidiary of Washington Mutual, maintains the Index and manages the Composite Northwest 50 Mutual Fund.
The index reflects a broadly diversified group of 50 common stocks of companies based in Washington, Oregon, Idaho, Montana and Alaska. Companies in the Index represent six industry sectors, with each sector weighted on the personal income derived from that sector.
Stocks within each sector are also weighted on the basis of their market capitalization.
ESI’s products include laser trimming systems for precise tuning of electrical equipment, laser processing equipment to improve semiconductor yields, and highspeed production and test equipment for ceramic capacitor manufacturers.
Composite Portfolio Manager David Simpson said Morrison Knudsen was dropped because it no longer meets the investment criteria for Northwest 50 Index companies.
The Boise-based firm has taken steep losses in recent quarters, and last month Chairman William Agee was forced to resign.