News--Morningstar:"Top Managers List Their Favorites
news.morningstar.com
>>>by Kunal Kapoor | 03:33 PM | 06-30-00
There's no one definition of value.
That thinking was apparent at "The Changing Face of Value" panel at the Morningstar Investment Conference Friday. Indeed, panelists Bill Nygren of Oakmark Select OAKLX and Oakmark OAKMX, Bill Miller of Legg Mason Value LMVTX and Legg Mason Opportunity LMOPX, and Chris Davis of Selected American Shares SLASX have all been accused by their peers of being untrue to the value discipline.
Nygren has owned stocks such as Amgen AMGN, Davis has owned the likes of Texas Instruments TXN and Oracle ORCL, and Miller was made famous by his investments in America Online AOL and Dell Computer DELL. It's worth remembering, though, that the panelists bought those stocks when others were staying away.
Lately, all three panelists have turned away from growth-oriented sectors, however. Miller pointed out that although technology stocks were undervalued in the mid-1990s, their current risk/reward payoff is poor. One stock he's bullish on, though, is Amazon.com AMZN, which he has added to in recent weeks since the stock's dive. He says that the company is misunderstood on Wall Street and that it will fund its future growth internally, without returning to the capital markets. He also spoke positively about Waste Management WMI.
Meanwhile, Nygren pointed to the positive attributes of his top holding, Washington Mutual WM. The stock currently trades at 7 times its earnings--low enough to make it cheap even if its profits were to decline in a rising-interest-rate environment. Nygren also pointed out that the thrift's top managers have a large amount of their personal wealth invested in the stock and that the company has repurchased shares in an aggressive buyback plan.
Davis, whose family is well known for its financial-stock expertise, went another way. He said that while his fund has sold its entire position in Oracle, it still has a significant position in Hewlett-Packard HWP--a stock that Miller finds expensive relative to peers such as Gateway GTW. Davis also said he is pouncing on stocks such as Costco Wholesale COST, which has been hammered excessively by the market for missing earnings' estimates just once." |
