Slow growth is a winner: Alfred Jackson's patient approach delivered positive returns.

Last year, Alfred Jackson, a partner at Davis Hamilton Jackson & Associates in Houston, took a look ahead and decided it was best to be conservative with his investment philosophy. Given the rising interest rat e environment and his belief that corporate profit margins had peaked during the first stages of economic recovery, he set out to analyze companies to determine whether their growth was sustainable over the long term.

That turned out to be a good plan. The five stocks Jackson selected exclusively for BLACK ENTERPRISE registered a 13.79% gain from Aug. 4, 2004, to Aug. 3, 2005. Even with one of his picks falling more than 5%, Jackson's portfolio performance beat the Standard & Poor's 500 Index, which rose 13.33%, and the Dow Jones Industrial Average, which rose 5.64% over the same period.

Schlumberger Ltd. (NYSE: SLB) turned out to be Jackson's best choice, jumping 38.49% from $62.49 to $86.54. Last year, Jackson said the global oil field and information services company would benefit from higher energy costs. Anyone who has passed a gas station and noticed the price increase at the pump knows he was on target. Since Jackson picked Schlumberger, oil prices have reached record highs of more than $70 a barrel due to the war in Iraq, damage to U.S.-based refineries during hurricane season, and heavy energy demand from countries with fast-growing economies such as China and India.

Johnson & Johnson (NYSE: JNJ) turned out to be Jackson's next best pick, rising 18.97% from $54.25 to $64.54. Since he selected J&J, the manufacturer of consumer healthcare products and medical devices such as drug-coated stents used to open clogged arteries, has reported strong sales. The company's devices and products have experienced strong growth, both domestically and overseas, in all its divisions. It's also planning to acquire Guidant Corp. in a bid to strengthen its cardiac device business.

Software giant Microsoft Corp. (NASDAQ: MSFT) also proved to be a solid selection. Shares of the manufacturer of the widely used Windows operating system and other software rose 9.25% from $24.87 to $27.17. Investors anticipate growth in a number of areas in the company, including digital music and computer gaming with its Xbox system. Microsoft has its own Internet search engine, which is expected to compete with Yahoo! and Google, and an overhaul of the Windows software is expected sometime in 2006.

The stock with the most modest gain in Jackson's portfolio was General Electric Co. (NYSE: GE), which rose 6.62% from $31.88 to $33.99. The conglomerate, which operates financing and entertainment units, and makes an array of products including appliances, jet engines, locomotives, and medical products has enjoyed good revenue growth in most of its businesses. However, its entertainment arm, NBC Universal, needs to see an improvement in prime-time ratings to match the growth rate of many of the company's other businesses.

Jackson's only misstep was pet products retailer PetSmart Inc. (NASDAQ: PETM). The company's shares fell 4.37% from $29.75 to $28.45. While Jackson was looking for continued growth in the business because of an increase in pet ownership and the company's efforts to expand its pet services business, shares tumbled after it, like many other companies, had to restate previous years' earnings in an effort to conform to new regulations on accounting for leases.

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