Bryan Ritz, Meridian Portfolio Manager, wins "Experts vs. Darts" stock picking contest; Ritz says Meridian's Sector Strategy gets the credit.ENGLEWOOD, Co.--(BUSINESS WIRE)--July 29, 1996--Results are in from The Wall Street Journal's most recent stock picking contest and Bryan M. Ritz, CFA (Computer Fraud and Abuse Act of 1986) Signed into law in 1986, the CFA was a significant step forward in criminalizing unauthorized access to computer systems and networks. The Act applies to "federal interest computers" that include any system used by the U.S. , a Portfolio Manager at Meridian Investment Management Corporation, picked the top-performing stock among his three industry peers. Ritz attributes his win to Meridian's ability to identify undervalued Undervalued A stock or other security that is trading below its true value. Notes: The difficulty is knowing what the "true" value actually is. Analysts will usually recommend an undervalued stock with a strong buy rating. sectors. "Once you're in the right sector," says Ritz, "it's easy to find the winners." Meridian manages over $500 million in private accounts using active sector rotation Sector Rotation The action of a mutual fund or portfolio manager shifting investment assets from one sector of the economy to another. Notes: Not all sectors of the economy perform well at the same time. and a pricing model based on Benjamin Graham's methodology of determining fair value. The winning company was DSC (1) (Digital Signal Controller) A microcontroller and DSP combined on the same chip. It adds the interrupt-driven capabilities normally associated with a microcontroller to a DSP, which typically functions as a continuous process. See microcontroller and DSP. Communications Corporation, the only stock the pros picked to show a positive return. DSC, which makes telecommunications systems and equipment, rose 6.2% over the contest period from January 9 to June 30, 1996. The Dow Jones Industrial Average Dow Jones Industrial Average The best known U.S. index of stocks. A price-weighted average of 30 actively traded blue-chip stocks, primarily industrials including stocks that trade on the New York Stock Exchange. posted a 10.2% gain during that time. The pros' collective -9.52% capital loss could beat neither the DJIA DJIA See Dow Jones Industrial Averager (DJIA). nor the Dartboard Portfolio, four companies that fell 5.3%. "Communications equipment manufacturers have been very undervalued, and bargain hunting is at the core of Meridian's management style," says Ritz, who joined Meridian in 1992 to specialize in domestic equities. Communications equipment manufacturers rose 15-20% year-to-date, substantiating that the industry was a good choice. However, Ritz candidly states that his winning stock underperformed its sector. "DSC Communications did not make our projections, but it is a very high quality company despite some unexpected issues that lead to the company's relative underperformance," he explains. Once inside an industry, Ritz says Meridian portfolio managers focus on the growth of a company, its quality, and its valuation in the industry. As Benjamin Graham Benjamin Graham A scholar and financial analyst who is widely recognized as the father of value investing. His famous book, "The Intelligent Investor", has gained recognition as one of the best and most important investment pieces written illustrating the fundamentals of a did, Meridian favors low debt companies. "DSC's primary business showed very high earnings growth and the financial strength to weather a downtick Downtick A transaction on an exchange occurring at a price below the previous transaction. Notes: In order for a downtick to occur, a transaction price must be followed by a decreased transaction price. in the industry or the economy," adds Ritz. As is the custom, Ritz and the second-place finisher of the contest are invited to participate in the next six-month Experts vs. Darts competition. "I've picked another telecommunications company, MFS MFS Medicare fee schedule Communications," says Ritz. MFS provides voice and data communications services to the government and private businesses. "The company has strong management," Ritz remarks. "They have the confidence to continually invest in themselves and appear to manage growth very well." Meridian Investment Management Corporation is a leader in the construction of customized growth portfolios through sector mutual funds and individual securities. Dr. Craig Callahan and Michael Hart, Meridian's Chief Investment Officer and President, respectively, co-founded the privately owned company in 1991. Meridian is headquartered in Englewood, Colorado, and markets its services primarily through financial planners and regional broker/dealers. More than 7,500 individuals, qualified pension plans and other institutions currently entrust over $500 million to Meridian's management. CONTACT: Thompson Becker International, Inc. Jennifer Regan or Ann Becker, 508/698-0448 |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion