Denise and all, check out this Reuters story. Unbelievable!:
FUND VIEW - Bonnel seeks growth stocks
Reuters Story - May 07, 1998 13:04
By Mark Lewis
NEW YORK, May 7 (Reuters) - As shares of EntreMed Inc.
fell back this week from Monday's frenzied rally, fund
manager Arthur Bonnel was happy to explain why the small
biotech firm with the hot anti-cancer drugs was not among the
drug companies in his growth-oriented portfolio.
"They're not making money, so I didn't own any of that,"
Bonnel said in a Reuters interview.
Bonnel, a momentum investor with a particular interest in
pharmaceutical companies, said his Bonnel Growth Fund prefers
bigger, already-profitable companies such as Warner-Lambert Co. and Pfizer Inc. .
EntreMed more than quadrupled in value on Monday after a
New York Times article praised the potential of the company's
anti-cancer drugs. But on Wednesday it closed at 31-1/8, off 12
from Tuesday's close.
Pfizer also traded lower, but Bonnel said he remained a
buyer. From its current levels near $110 per share, he sees
Pfizer trading close to $300 within the next 12 months.
The big pharmaceutical companies invest heavily in research
and development, with predictable payoffs for investors, Bonnel
said. Pfizer's new Viagra impotence drug is only the most
recent blockbuster product to emerge from the laboratory.
"We're just on the cusp of major breakthroughs," he said.
The industry "is going to be coming out with some tremendous
drugs."
He said technology companies also are poised to reap
further benefits from their research and development
investments, especially those involved in the digital flow of
information.
But here again, Bonnel prefers established, profitable
companies like Cisco Systems Inc. to the more
speculative, high-multiple Internet stocks attracting so much
recent attention on Wall Street.
As of the end of March, about 3 percent of the Bonnel
fund's $110 million in assets under management were invested in
Cisco.
"They're slowing down a little bit but I don't think
they're going to stop," he said of Cisco's momentum. "They are
going to continue to be the industry leader."
Cisco on Wednesday said it will work with U S West
Communications Group and Dell Computer Corp.
to introduce personal computers with high-speed digital modems
that work over traditional copper telephone wires.
Cisco on Wednesday closed up 2-3/8 at 76. Bonnel saw the
stock approaching the $120 level within two years.
The Bonnel Growth Fund was up 13.5 percent year-to-date
compared with an S&P 500 up 15 percent. Bonnel's three-year
average annual total return was 26 percent.
But in the near term, Bonnel said he would not mind seeing
a correction of five percent to 10 percent, to consolidate the
recent advances.
"I would like to see the market consolidate at these
levels," he said.
Asia's economic woes should continue to dampen U.S.
companies' earnings during the second quarter, Bonnel said. But
if inflation remains quiescent, next year will see a return to
recent earnings-growth form.
"Next year we're going to see some prodigious gains in
earnings, and that's going to keep this market rolling," he
said.
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