Questions With Legg Mason Bargain Hunter Lisa Rapuano
By Ian McDonald
Senior Writer
02/11/2002 07:26 AM EST
Maybe you know Lisa Rapuano's name and maybe you don't. You should, though.
A halo of deserved praise surrounds her boss Bill Miller, who manages the Legg Mason Value Trust fund, among others, and who is the only fund manager to top the S&P 500 over each of the past 11 years. But not much of that light is shed on his team, including Rapuano, who started covering tech stocks for him in 1994.
thestreet.com
The thing I like about Calpine [down 84% over the past 12 months] is that psychological and cyclical issues are depressing the stock so much that I'm fairly confident it's mispriced in the one- to three-year time horizon. ... It looks to me that their comment that they can earn $1.70 this year is true; that the assumptions behind it make sense.
I think the company is currently in a depressed environment, which I don't think will continue. The psychological issue ... is that they have Enron dust on them. They're automatically thrown out [because] nobody wants to own these companies, so that increases the probability that things are mispriced. Calpine was ... going to be this new-age power generation company of the future. I don't know if that ever comes back. It probably doesn't.
If they just stop building [plants] altogether, and just use their maintenance capital expenditure, I believe it would be worth 10 times that free cash flow, which I believe is $18 or $19 right now. My analyst thinks it's worth $25, but I don't really agree with him yet.
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I agree with this analyst.
Good luck. Winkman |
