Here is one fund manager who doesn't like Lam; if one isn't buying here, exactly when will they be buying? I for one do not follow their logic:
FUND VIEW-Janus 2 fund manager seeks bargains
By Judith Crosson
DENVER, Oct 17 (Reuters) - John Schreiber, portfolio manager of the Janus Fund 2 (Nasdaq:JTWOX - news), has sold some stocks, often at a loss. But that's not always a negative, he said.
``When the stock was down another 30 percent or so (after he sold), it's as if every sale has been a good sale. That's painful and yet pleasing,'' he said.
``The benefit of cutting losers is that you generate some tax losses that can benefit the fund's shareholders going forward,'' he told Reuters in an interview.
Mutual fund company Janus Capital Corp., identified with high-flying technology stocks in the boom of the late 1990s, has taken a less aggressive approach. As a result, Schreiber has added beaten-down stocks like Starwood Hotels & Resorts Worldwide Inc. (NYSE:HOT - news) and Motorola Inc. (NYSE:MOT - news).
But he has also thrown in the towel on other stocks that were favorites, including semiconductor production equipment maker Novellus Systems Inc. (NasdaqNM:NVLS - news), hit by order delays, and Lam Research Corp. (NasdaqNM:LRCX - news), whose order backlog from the semiconductor industry has declined.
``I've been redeploying cash I've freed up into areas where, the economy aside, fundamentals of the business are working and improving now,'' he said.
Janus 2, a growth fund, has struggled since its inception in late December. Year to date, the fund is down 29 percent, pushing assets under management to $363 million as of the end of September.
It is performing in the bottom half of large-cap growth funds, according to tracking service Morningstar Inc. and has trailed the S&P 500 index, which is off about 17 percent this year.
The fund was created after the Janus Fund, its flagship fund, was closed to investors when it grew too large to handle efficiently. The Janus Fund is down some 31 percent so far this year, compared with an annual average gain of nearly 11 percent over the past 10 years.
Denver-based Janus is owned by Stilwell Financial Inc. (NYSE:SV - news).
Since the Sept. 11 attacks on the World Trade Center and the Pentagon, consumers were looking for safety, a trend that Janus 2 is looking to follow, Schreiber said.
``The irony is that in the wake of the tragedy, there is renewed psychological interest in having a cell phone as a safety tool,'' he said, which led him to Motorola. ``Inventory in the channel of wireless handsets and wireless semiconductors had already peaked and was being worked down fairly well,'' he said.
``Also, Motorola has a large semiconductor business showing signs of reaching a bottom. Those are two major businesses no longer deteriorating as they were in the past,'' he added.
Improvements in cash flow and the balance sheet have also positioned Motorola for a rebound. ``If cash flow improves, improving net income follows,'' Schreiber said.
He said he had ``pretty good-sized positions'' in Novellus and Lam Research, but decided to liquidate them completely. ``The irony is that it did appear we were starting to see a bottom fundamentally,'' he said
Novellus was the first stock he sold after the stock market reopened Sept. 17, nearly one week after the attacks. ``Nine months of uncertainty with respect to forward orders was something we just couldn't handle,'' he said.
He's also looking for stocks that reflect a more cautious lifestyle after the attacks.
``Cocooning --I've certainly thought a lot about that lately,'' he said. ``Being in a home office from which you telecommute rather than drive into downtown Manhattan and go into a skyscraper, or inexpensive local entertainment like movies or cable TV,'' he said.
Media and Internet company AOL Time Warner Inc. (NYSE:AOL - news) remains at the top of Schreiber's core holdings. ``AOL is a great example of defensive growth,'' he said. Forty percent of its business comes from recurring subscriptions that ``don't stop on a dime when the economy slows.'' Another 40 percent of the company's revenues come from movies, television production and music, and only 20 percent from advertising, he said.
Schreiber bought Starwood Hotels after the market reopened last month. He had owned and sold the stock earlier in the year when it was in the ``high 30s'' but took another look when its value was cut in half as business travel slowed to a trickle after the attacks. He expects financing to build new hotels to slow.
``It was a nice chance to scoop up a stock below $20,'' he said. Starwood fell 19 cents to $23.66 Wednesday on the New York Stock Exchange. |
