Undiscovered growth stocks.

Dawna Edwards of Alpha Capital Management looks for stocks moving into new markets

To boldly go where no company has gone before. That phrase sums up the approach that Dawna Edwards, vice president and managing director or equity investments at Alpha Capital Management in Detroit, takes when deciding which stocks to buy. According to Edwards, how a company expands its customer base, whether or not the concern is interested in penetrating new markets or whether it is involved in any joint ventures are three factors that contribute to make a company an attractive investment.

Edwards, who oversees Alpha Capital's equity and balanced portfolio, worth $210 million under management, says she also looks at a firm's financial stability and earnings growth. In addition, she believes the success of a company is influenced by its expansion goals. In fact, all the companies Edwards selected have their irons in a number of fires, either through construction and expansion of their own facilities, or the acquisition of, and partnering with, other already established companies.

Take Federal Home Loan Mortgage Corp. (NYSE: FRE), also called Freddie Mac, based in McLean, Virginia. The government-sponsored enterprise which operates in the secondary residential mortgage market, earlier this year; announced deals with Wells Fargo & Co. (NYSE: WFC) and Bank of America Corp. (NYSE: BAC) to purchase most of their outstanding mortgage loans.

Then there's Family Dollar Stores (NYSE: FDO). The Charlotte, North Carolina-based retail chain is set to open 300 new stores next year, as well as a fifth distribution center in the Midwest.

St. Louis-based Anheuser-Busch Companies (NYSE: BUD), the world's largest brewer, also fits Edwards' growth and expansion profile. In the past several years, Anheuser-Busch has penetrated several markets by entering into a joint venture with Kirin Brewery of Japan, and purchasing a minority stake in Mexican brewer Grupo Modelo, maker of Corona beer.

Her other two picks, Cardinal Health Inc. (NYSE: CAH), a Dublin, Ohio-based distributor of pharmaceutical products, health and beauty care aids, and surgical and hospital supplies; and Intel (NASDAQ: INTC), the Santa Clara, California computer components manufacturer, have both been on the acquisition or joint venture trails. Cardinal, for example, acquired Medsurg Industries, manufacturer of disposable medical products, in July 1999.

Edwards is certain that the collaborations of her stock picks, along with their financial stability, steadily increased earnings and ability to minimize debt make them attractive investments.

Edward's Market Movers

Company                             12-Month     P/E on Projected
Exchange: Symbol       Price(*)   Price Target    1999 Earnings

Anheuser-Busch         $81.25         $90              29.5
NYSE: BUD

Cardinal Health         63.81          96              38.9
NYSE: CAH

Family Dollar Stores    19.44          26              25.2
NYSE: FDO

Freddie Mac             53.00          70              20.1
NYSE: FRE

Intel                   85.94         100              40.7
Nasdaq: INTC

                       Est. 5-Yr.
Company                Annual EPS
Exchange: Symbol         Growth

Anheuser-Busch            8.9%
NYSE: BUD

Cardinal Health           22.2
NYSE: CAH

Family Dollar Stores      23.6
NYSE: FDO

Freddie Mac               15.1
NYSE: FRE

Intel                     20.3
Nasdaq: INTC

Company
Exchange: Symbol         Why Stock Will Outperform

Anheuser-Busch         * This producer of the most preferred beer by
NYSE: BUD                consumers throughout the nation is
                         penetrating specialty beer markets

Cardinal Health        * With a 1998 year-end debt of 14.4%
NYSE: CAH                illustrating the firm's ability to minimize
                         debt, Cardinal poses a desirable
                         investment opportunity

Family Dollar Stores   * Family Dollar Stores is actively expanding
NYSE: FDO                its customer base, opening 300 new stores
                         in 2000 and positioning itself for
                         continued growth in the new millennium

Freddie Mac            * Backed by the government in addition to a
NYSE: FRE                steadily increasing stock price over the
                         course of the decade, stock for the
                         secondary-residential-mortgage enterprise
                         will continue to build, Edwards predicts

Intel                  * The computer components designer is
Nasdaq: INTC             expanding into new markets, introducing new
                         products and collaborating with other
                         manufacturers, making Intel an attractive
                         investment option

(*) Closing price as of September 8, 1999

Source: Dawna Edwards, Alpha Captial Management; Yahoo! Finance; Zacks Investment Research.3