Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : PFE (Pfizer) How high will it go? -- Ignore unavailable to you. Want to Upgrade?

To: Jim Lamb who wrote (4537)	7/22/1998 4:45:00 PM
From: Anthony Wong	Read Replies (1) \| Respond to of 9523

Invesco Growth's May Likes Pfizer, Microsoft: Bloomberg Forum Bloomberg News July 22, 1998, 4:14 p.m. ET Invesco Growth's May Likes Pfizer, Microsoft: Bloomberg Forum New York, July 22 (Bloomberg) -- Slowing profit growth doesn't trouble Trent May. The manager of the $990 million Invesco Growth Fund says the much ballyhooed slowdown in U.S. corporate profits is concentrated in a few industries and companies, such as energy and General Motors Corp. Look elsewhere, and companies still manage to churn out healthy profit gains, he said. By building a concentrated portfolio of 30 to 35 stocks encompassing the best of these companies, May has managed to turn in a 24 percent return so far this year, topping the 20 percent return in the Standard & Poor's 500 Index. ''The underlying growth prospects are actually very healthy,'' May, who has run the fund for three years, told the Bloomberg Forum. ''You have a very favorable interest-rate environment, and inflation remains subdued.'' ''The companies that are not exposed to the commodity industries that are being impacted by Asia are actually reporting very good earnings, so the backdrop is clearly healthy for the market. The fund returned 28 percent in 1997, lagging the 33 percent return of the S&P 500. Analysts who follow the companies in the S&P 500 expect them to post operating earnings growth of 7.5 percent this year and 17.9 percent in 1999, according to First Call Corp. Strategists and economists who forecast earnings based on broad trends in the economy and financial markets expect earnings growth of 8.6 percent this year and 7.5 percent in 1999. S&P operating earnings grew 18.5 percent in 1995, 8.4 percent in 1996 and 11 percent in 1997, First Call said. Buying the Best May buys companies he believes are the best in their industries, such as Pfizer Inc., the second-largest U.S. drug maker. The maker of the Viagra impotence treatment boasts strong management, healthy profit margins and a good pipeline of new products in an industry that benefits from the aging population, he said. ''Pfizer is the prototypical stock that we like,'' he said. ''The company is hitting on all cylinders right now.'' The fund's largest holding, at about 4.4 percent of assets, is Microsoft Corp., the No. 1 maker of software for personal computers. May said he doesn't see any signs the company is stumbling. The company dominates the market for PC software and is expanding its ''enterprise'' computing products with its NT operating system, which will be upgraded next year, May said. ''There's just a number of drivers'' for Microsoft's profit, he said. The other stocks among the fund's top five holdings are Wal- Mart Stores Inc., American International Group Inc. and Eli Lilly & Co. While the stocks of many large companies are expensive, as measured by the ratios of their stock prices to earnings per share, they can churn out better returns on invested capital than small companies, he said. ''I'm not sure price-to-earnings ratios are necessarily the best indicator of what a company's worth,'' May said. ''Accounting earnings can be manipulated a number of different ways.'' --Phil Serafino in the New York newsroom (212) 318-2358/wm