Keep an eye on oil: Calvin H. Baker offers a range of large- and mid-cap stocks.AS A MANAGING DIRECTOR AND SENIOR portfolio manager at Brown Capital Management Inc. (No. 6 on the BF, ASSET MANAGERS list with $2.7 million in assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. ), Calvin H. Baker is part of the team that leads the firm's large- and mid-cap Mid-cap Short for "Middle Cap," mid cap refers to stocks with a market capitalization of between $2 billion to $10 billion. Notes: As the name implies, a mid-cap is in the middle of the pack. A mid-cap isn't too big, but at the same time has a relatively decent market cap. mutual funds, including the Brown Capital Management Mid-Cap fired (BCMVX). A former energy company CFO See Chief Financial Officer. and treasurer TREASURER. An officer entrusted with the treasures or money either of a private individual, a corporation, a company, or a state. 2. It is his duty to use ordinary diligence in the performance of his office, and to account with those whose money he has. , Baker believes that energy prices will continue to trend upward over the next three to four years, leading to opportunities for investors. Last year, there were a record number of mergers in the oil industry--485 deals worth $82 billion. "I don't don't 1. Contraction of do not. 2. Nonstandard Contraction of does not. n. A statement of what should not be done: a list of the dos and don'ts. think there will be as many mergers as last year, but the trend will continue," says Baker. While he believes that some of the larger companies, such as Baker Hughes Baker Hughes NYSE: BHI is the world's third-largest oilfield services company behind Schlumberger & Halliburton, its main competitors. Baker Hughes provides the world's oil & gas industry with products and services for drilling, formation evaluation, completion and production. Inc., may be involved in merger activity, investors should also look at smaller companies, such as Cameron Cam·er·on , Mount A peak, 4,342.6 m (14,238 ft) high, in the Rocky Mountains of central Colorado. International Corp.. a parts manufacturer for the oil giants. Baker says that such companies can be smart acquisitions for larger companies, some of which are themselves positioned to grow through acquisition. Calvin H. Baker Managing Director Brown Capital Management Inc.
BAKER'S STOCK PICKS
Abbott American
Laboratories International
(ABT) Group (AIG)
Price: Price:
$52.69 $69.30
12- to 18-month 12- to 18-month
target: target:
$70 $86
P/E Ratio * P/E Ratio *
19.4 10.9
Est. 5-year Est. 5-year
annual EPS annual EPS
growth rate: growth rate:
10.3% 13%
Why stock will Why stock will
outperform: outperform:
Already surpassing $2 The insurance
billion in sales, the conglomerate operates
company's rheumatoid in more than 130
arthritis drug, Humira, countries. Expansion
is expected to grow by into China and Taiwan
more than 32% should benefit shares.
annually by 2009.
Cameron Coach
International Inc.
Corp. (CAM) (COH)
Price: Price:
$57.76 $48.22
12- to 18-month 12- to 18-month
target: target:
$70 $60
P/E Ratio * P/E Ratio *
15.0 28.6
Est. 5-year Est. 5-year
annual EPS annual EPS
growth rate: growth rate:
24% 21%
Why stock will Why stock will
outperform: outperform:
A manufacturer of oil The luxury retailer
and gas pressure- of handbags and
control equipment, accessories boasts
Cameron posted impressive sales growth
revenue growth of and is capturing market
46% in 2006. share abroad.
DATA AS OF 3/7/07/ * BASED ON 2007 ESTIMATED EARNINGS
SOURCE: YAHOO! FINANCE BAKER DOES NOT OWN SHARES OF
THE RECOMMENDED STOCKS
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