Genelabs was the winner's pick in the Wall Street Journal's Darts vs. Pros column. Here are excerpts from today's article:
By Georgette Jasen
Staff Reporter of The Wall Street Journal
A team of investment professionals crushed the forces of chance in this
column's latest stock-picking contest, but barely beat the Dow Jones Industrial
Average.
The four pros posted an average investment gain of 10.9% from Sept. 10,
1997, to Feb. 27, 1998, compared with a 3.3% loss for a portfolio of stocks
chosen by flinging darts at the stock tables. The Dow industrials rose 10.7%
during the same period.
The top-performing stock in the pros' portfolio was Genelabs Technologies
Inc., a Redwood City, Calif., biotech company focused on gene-regulating
drug discovery whose stock rose 20.7% during the competition. It was the
selection of Morton A. Cohen, chairman and chief executive of Clarion Group,
an investment-management firm in Cleveland. David R. Hargrove of Tucker
Hargrove Management, an investment-advisory firm in Media, Pa., was in
second place with Electronic Data Systems Inc., the Plano, Texas, computer
services company. Its stock was up 17.8% in just under six months.
As is the custom of this column, Mr. Cohen and Mr. Hargrove are returning
for another round against the darts. Joining them for the coming six months are
Howard Schilit, president of Center for Financial Research & Analysis in
Rockville, Md., and Alan H. Wapnick, director of domestic investment
strategy for Lexington Management Corp. in Saddle Brook, N.J.
Mr. Cohen's choice is to continue with Genelabs. "I'm sticking my neck out . .
. it's speculative," he says, acknowledging that the company has no earnings.
Mr. Cohen says he is impressed with the company's principal technology,
which assists in the creation of gene-specific small organic molecules that bond
to DNA. "It has the potential for creating an entirely new class of drugs," he
says. He also reiterated comments made six months ago praising the
company's management.
The company and its technology gained credibility recently with the
announcement of a $13.6 million three-year grant from the Defense Advanced
Research Project Agency to discover drugs that can be used against
biological-warfare agents, he says. Mr. Cohen says he currently holds between
2.5% and 3% of Genelabs stock for himself and the hedge fund he manages.
Genelabs closed yesterday on the Nasdaq Stock Market at $4.25, up 3.125
cents but just under its closing price when the last contest ended Feb. 27. |
