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Non-Tech : Philip Morris - A Stock For Wealth Or Poverty (MO) -- Ignore unavailable to you. Want to Upgrade?

To: md1derful who wrote (1923)	7/13/1998 4:00:00 PM
From: Geoff	Read Replies (1) \| Respond to of 6439

Interesting comments from some Fund manager at OnCap Advisors. ============= But Colin Glinsman of OpCap Advisors can. He's been running the $152.2 million Oppenheimer Quest Balanced Value Fund, previously known as the Oppenheimer Quest Growth and Income Fund, since December of 1992. He's a 1980 graduate of Yale with a Master's from New York University who describes his investment approach as "value- oriented with an emphasis on the quality level of the underlying businesses." And he's done mergers and acquisitions work, so he knows how to value a business. What three stocks would he buy right now in the middle of July? Glinsman says he'd pick up Philip Morris (MO), Canadian Pacific (CP), and Intel (INTC) this week. They're all among the top 10 holdings in his fund. Philip Morris In Glinsman's view, there are two main reasons to own Philip Morris now. One is valuation and the other is the business characteristics of the company. "Very important is the valuation, which is extremely low," he says. With the stock now around $40 per share, "it's 11 or 12 times the earnings run rate, which is dramatically below normal." But for the political, regulatory and legal issues surrounding the company, he says it should probably trade closer to 20 times earnings, or around $70 per share. And his longer term target for the stock is "approximately $100 per share." More important are the company's business characteristics. Glinsman has met on site with top management. He says MO has "great market shares, good pricing over time, and a very high return on investment." He says almost 50 percent of the company's cigarette business is outside the U.S. where the "dynamics are far different." So what's going to happened to light up the stock's performance? Glinsman says, "Either there will be a large political development with regard to the stock and the industry as a whole, which will clarify the direction the industry will take, or there won't be. in which case people will refocus on the company's legal position, which is, in fact, very strong."