My Yahoo!Labor Day Stock And Fund Bargains
NEW YORK - Heading into the Labor Day weekend, the question on many an investor's mind is probably "how much steam is left in the rally that started after the July 23 bottom?" As traders return from summer vacations next week and volume picks up, answers should come quickly. For now, some of the best-performing newsletters are sticking to strategies that have served them well and continuing to buy when it fits their game plan.
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Another newsletter focused on small-caps, the Low Priced Stock Survey, a supplement to Dow Theory Forecasts, has enjoyed consistently stellar performance, returning 14.4% annualized since the end of 1998 and 17.1% in the brutal first half of 2002. Dave Wright, an analyst at DTF who does a lot of work on the Low Priced Stock Survey, has a number of stocks that he says still look like good buys. Copart (nasdaq: CPRT - news - people ) auctions off salvage vehicles for insurance companies and has seen its shares beaten up in recent months--but is still posting solid growth in its business. Wright also thinks Skechers (nyse: SKX - news - people ) is a good buy, saying the sneaker company shows good growth and reasonable valuations in stock price. Videogame publisher THQ (nasdaq: THQI - news - people ) saw profits rise 43% in its most recent quarter, but the company's shares--like most--took a beating in July. Wright says the stock is a strong buy and that he likes its market share in the handheld game market. Also, with game system sales heating up for Microsoft (nasdaq: MSFT - news - people ) and Nintendo, the industry as a whole looks strong going into the holiday shopping season.
Wright's last Labor Day bargain is Flagstar Bancorp (nyse: FBC - news - people ), the biggest thrift in Michigan. Growth is strong, too: Earnings for the first half of 2002 were up 77%.
In mutual funds, Marty Devault, portfolio manager at No-Load Fund*X, says the rebound of the last five weeks hasn't done much to change his fund rankings. Devault says that until proven otherwise in the longer term, value funds should still trump growth--and with a bit less conviction he says that small-caps should still outpace large-caps. "The major trends are still in place," says Devault, "but there will be noise along the way."
Fund*X recommends five funds based on long-term performance: Yacktman (nasdaq: TACKX - news - people ), Clipper Fund (nasdaq: CFIMX - news - people ), PBHG Clipper Focus (nasdaq: PBFOX - news - people ), American Century Equity Income (nasdaq: TWEIX - news - people ) and FAM Value (nasdaq: FAMVX - news - people ). Devault also says that the Oakmark Fund (nasdaq: OAKMX - news - people ) looks strong.
According to Hulbert, No-Load Fund*X has returned an average annualized gain of 18.1% over the last ten years.
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