Legg Mason Sticks With Winning Stocks Fund Group Takes
Major New Position In MCI WorldCom
Investor's Business Daily, 11/27/98
Author: Nancy Gondo
Legg Mason's top two holdings are a pair of the decade's hottest
growth stocks: America Online and Dell Computer.
And it's not due to temporary plays in the high-growth technology
sector. The fund group tends to be a long-term holder.
''It depends on the fund of course, but within equity (funds) we're
known to have a bit of a franchise in the value area,'' said Ed
Taber, head of asset management for the group.
But, he adds, the fund family will blend value and growth when it
comes to picking stocks, if it seems the best opportunity.
''Value is always on our thoughts, but there are times when we're
not going to be constrained by being a value zealot - and we
have been rewarded in doing so in the past,'' he said.
The group's top 25 holdings have not changed much since
September, Taber says. And that's worked in Legg Mason funds'
favor.
America Online reached new closing highs Monday and Tuesday
on reports the online service is buying Netscape Communications
for $4.2 billion in stock.
Though AOL lost 4 cents a share in fiscal '97, it came back to
earn 28 cents in the year ended June. Wall Street expects the
company to double its profit to 56 cents next year and sees a
54% jump to 86 cents in '00.
The stock has almost doubled this year. Sales increased 54% the
past two years. The Legg Mason fund family sold 145,000 shares
of AOL during the third quarter, but it's still the group's biggest
holding.
Taber thinks the AOL-Netscape merger should be a positive
move for AOL. And he's not alone.
On Wednesday, Lehman Brothers analyst Brian Oakes raised his
price target on AOL to $110 from $75 and maintained his ''buy''
rating.
''Given the strength in AOL's current business and limited
financial risk in the deal, we feel comfortable raising our target
price to 110 even though we realize valuation is being stretched
-but this is the Internet and AOL is the dominant company,''
Oakes said. ...
|
