No cheap thrills!

Nate Carter's bargain picks got slashed

Portfolio managers like Nate Carter, president and chief investment officer of Lakefront Capital Investors in Detroit, may feel they got gypped. That's because Carter's large-cap bargains from last year's Private Screening were slashed in price due to production cuts and poor sales growth. His portfolio for last year's Private Screening lost 8.28% since recommendation.

For penny-pinchers looking for a sale, check out Kmart's (NYSE: KM) new prices. It's the nation's second largest discount retailer, and the world's third largest general merchandise retailer. Yet, shares have tumbled 52.55%, since recommendation. Carter says the retail sector has slowed and that management--with new CEO Chuck Conway--is still realigning the company, the results of which are still to be seen.

Travel-services giant American Express (NYSE: AXP) just missed making it into the black. Even still, "shares have risen a modest 6.27% since last year's recommendation, and travel-related sales are growing at a 3.5% annual clip," says Carter. He remains bullish on this stock, citing rapid international growth in the near and long term. Even with the slip, American Express is holding its own with a 3-for-1 stock split in May, to bring it back down to earth after trading as high as $168.50 up to that point.

Tricon Global Restaurants (NYSE: YUM) is suffering from food poisoning. The stock has felt ill will from investors, accounting for its loss of 1.5.21% since recommendation. Carter admits that KFC and Taco Bell, two of Tricon's top brands, have had sluggish same-store sales growth. "Over the long term, however, we continue to see value in YUM shared' he says.

A supplier of automotive components and modules, Delphi Automotive Systems (NYSE: DPH) is down 22.73% since recommendation. Carter explains that the stock has been "hurt by production cuts by the Big Three auto companies, loss of market share by GM (its largest customer by far), and concerns of an economic slowdown? Ever the optimist, he is upbeat about the supplier's potential, citing very little downside and the ultimately less cyclical auto industry.

Pharmacia Corp. (NYSE: PHA) merged with Monsanto Co. in December, making it one of the world's fastest growing pharmaceutical companies. It has a foothold in research and development and a strong pipeline of new products. It ended strongly, with a 42.82% total return since recommendation. Carter still believes the stock will reach his target price of $70. "The strength of drugs such as Celebrex and Xalatan ... should support continued earnings growth in the high teens," he says.

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