Winning through diversification: Jeffrey Marcus finds it the main ingredient for successful investing.Jeffrey Marcus, senior portfolio manager at Paradigm Asset Management Co. L.L.C., (No. 14 on the BE ASSET MANAGERS list with $1.06 billion 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. ) predicts the economy will slow in the second half of the year due to the rising price of oil and higher interest rates. As inflation works its way through the economy, Marcus sees economic growth receding from a 5.3% annual rate during the first quarter of 2006 to 3% in the fourth quarter. While recent economic news, such as low unemployment, good corporate earnings, and increases in consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. and consumer confidence is encouraging, Marcus says that won't be enough to stop the impending im·pend intr.v. im·pend·ed, im·pend·ing, im·pends 1. To be about to occur: Her retirement is impending. 2. downturn. He forecasts that the price of everything, from manufacturing raw materials to food and medicine, is going up. And interest rates are slowing the real estate market and increasing the cost of borrowing. "In this environment, investors should rely on diversification as the main ingredient for their investment strategy. By taking subtle bets, you will be successful in the long term," Marcus says. Paradigm, a White Plains, New York-based asset management firm, manages $900 million in assets for institutional investors such as American Express, the Chicago Transit Authority
A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. , price-to-earnings ratios, and long-term earning-per-share performance to identify industry sectors with the most promise. Marcus says the company invests in businesses with strong earnings, or revenue growth potential. The following are Marcus' selections. One stock he finds promising is Archer-Daniels-Hidland CO. (NYSE NYSE See: New York Stock Exchange : ADM See add/drop multiplexer. (language) ADM - A picture query language, extension of Sequel2. ["An Image-Oriented Database System", Y. Takao et al, in Database Techniques for Pictorial Applications, A. Blaser ed, pp. 527-538]. ), which procures, transports, stores, produces, and merchandises agricultural commodities and products. "As the need for alternative energy continues, it's worthwhile to note that Archer-Daniels' production of ethanol accounts for 25% of the current U.S. ethanol capacity," says Marcus. Coldwater Creek Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CWTR CWTR Child Welfare Training Resources CWTR Climb Well to Right ), a retailer of women's apparel, jewelry, and gift items, is also on Marcus' radar. The company, which operates nationally via catalogs, direct mail, and the Internet, is experiencing an increase in sales. Lockheed Martin Corp. (NYSE: LMT LMT left mentotransverse (position of fetus). ), a worldwide aeronautic aer·o·nau·tic also aer·o·nau·ti·cal adj. Of or relating to aeronautics. aer  o·nau ,
electronic, and information technology company, has been a reliable
performer for Marcus. With its ability to conduct research and develop
and manufacture advanced technology systems, products, and services for
military and government agencies "Lockheed consistently wins
government contracts, and its earnings before interest and taxes In financial and business accounting, earnings before interest and taxes (EBIT) is a measure of a firm's profitability that excludes interest and income tax expenses.[1]EBIT = Operating Revenue – Operating Expenses + Non-operating Income has been very impressive, quarter after quarter, for the last 10 years," says Marcus. And Marcus' final pick is Precision Castparts Corp. (NYSE: PCP PCP abbr. 1. phencyclidine 2. primary care physician Pneumocystis carinii pneumonia (PCP) ). The company manufactures complex metal components and products. "Largely due to its operational efficiencies, Precision most recently reported record sales and earnings. The company's businesses are strategically positioned to take advantage of growth in aerospace, automotive, and other markets," says Marcus.
12-to 18- P/E on
Company Month Projected
Exchange: Symbol Price Price Target 2004 Earnings
Archer-Daniels-Midland Co. $39.80 * $42.00 22.5
(NYSE: ADM)
Coldwater Creek Inc. $27.79 $28.00 44.3
(NASDAQ: CWTR)
Lockheed Martin Corp. $72.76 $75.00 15.0
(NYSE: LMT)
Precision Castparts Corp. $58.75 $65.00 18.4
(NYSE: PCP)
Est. 5-Yr.
Company Annual EPS
Exchange: Symbol Growth Rate Why Stock Will Outperform
Archer-Daniels-Midland Co. 9% As demand for commodities
(NYSE: ADM) continue to increase, the
company's operations will
continue to grow.
Coldwater Creek Inc. 31% The company's profit margins
(NASDAQ: CWTR) are increasing due to robust
sales and controlled
expenses.
Lockheed Martin Corp. 11% Lockheed consistently wins
(NYSE: LMT) government contracts and its
earnings have been very
impressive, quarter after
quarter, for the last 10
years.
Precision Castparts Corp. 16% The company's businesses are
(NYSE: PCP) strategically positioned to
take advantage of growth in
aerospace, automotive, and
other markets.
* ADJUSTED FOR DIVIDENDS AND STOCK SPLITS (RECOMMEND DATE: MAY 18)
SOURCE FOR P/E AND GROWTH RATE: YAHOO! FINANCE
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