"Berkshire 25% undervalued at current levels"--Freedom Captital Mgt...
cnbc.com
>>>Tony Gambacorta, chief investment officer of Freedom Capital Management LLC, said presidential politics is having a very negative effect on market psychology in the SHORT-RUN.
"The only good news is that eventually this must end, and we believe a number of companies currently represent excellent value," Gambacorta said. "We also believe that the Fed may ease in the first quarter of 2001, as economic data shows the economy slowing."
We favor companies that posses strong financials, and dominate their particluar industry, and can generate a 12 to 15% growth rate in earnings in the next three to five years, he said.
Gambacorta said his company also likes companies that are positioned in industries which are consolidating, such as Financial Services, Technology and Media.
Gambacorta was Friday's Taking Stock guest on Market Watch. Check out his stock picks below with his comments exclusive to CNBC.com. Use the CNBC.com tools to research each pick.
FINANCIAL SELECT SECTOR {XLF}
• The Standard and Poors Financial Sector Spider is a basket of stocks that is comprised of the Financial Services companies in the Standard & Poors 500 Index
• This security allows investors to invest in the consolodation trend among Money Center banks, brokerage firms and insurance companies
• We believe that investors buying the XLF can realize gains of 25-30% in the next 12 months, as financial stocks benefit from declining interest rates and further consolidation
TECHNOLOGY SELECT SECTOR {XLK}
• The S&P Financial Sector Spider is a basket of stocks that is comprised of the leading Technology in the S&P 500 Index
• This security allows investors to invest in the leading technology stocks that will benefit from the coming consolidation in the Technology Sector. We believe that well-capitalized firms can acquire smaller companies that posses leading technology, but lack the financial resources to bring them to market
• We believe investors buying in the XLK can realize returns of 30-35%
BERKSHIRE HATHAWAY INC {BRK/B}
• The company is run by Warren Buffett, and represents an excellent mix of businesses, with a strong emphasis on insurance
• Owns GEICO Insurance, Berkshire Hathaway Group, and General Re., which account for approximately 50% of Berkshire Hathaway's revenues
• General Re is turning around after posting significant losses in 1999
• We see the stock as 25% undervalued at current levels, and expect the share price to continue to improve with General Re's results <<< |
