GUIDE 2016
PART2
TOOLS
Going against the grain, these fund managers have outperformed their
peers with big bets on relatively few stocks. A look into these investors'
strategies and the companies they favor could pay off for you as well.
By
CAROLYN
BIGDA
+
Photographs by
MIKE
McGREGOR
98
MONEY.COM
I JANUA RY / FE B RUAR Y
2 016
THE PICKS
PFIZER (PFE)
$32.25 P/ ERATIO: 13.6
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MONEY.COM
HONEYWEll
INTERNATIONAL (HON)
$102.00 P/E RATIO: 15.7
For earnings growth and
good valuations, Carpen
ter says she and her
co-managers "love the
industrials; especially
Honeywell, which makes
everything from home
security systems to
airline parts. CEO David
Cote says he wants
Honeywell to be the
Apple of.industrials, and
in 2014 the company
launched an initiative to
make products. like the
Lyric smart thermostat.
attractive and.easy to
use. The efforts are
paying off: Analysts
expect Honeywell's 2016
earnings to hit $6.51 a
share, up 6.7%. At the
same time, the stock
trades below the S&P
500's PIE of 17.4.
NOTES: Stock prices. PIE ratios (all of which are forward looking). returns. and yields are as
of Dec. 9. 2015. Growth of $10.000 is as of Nov. 30. 2015. SOURCES: Morningstar. Thomson Reuters
,J, I
OAKMARKGLOBALSELECT (OAKWX)
II EXPENSES: 1.13% II MINIMUM: $1,000 II 5-YEAR ANNUALIZED RETURN: 10.4% 1110-YEAR: N.A.
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THE PICKS
AMERICAN INTERNATIONAL
GROUP (AIG)
$62.25 P/ ERATIO: 12.1
OAIMLER (DDAIY)
$84.25 P/E RATIO: 10.6
Volkswagen's emissions
scandal and slow growth in
emerging markets weighed
on stocks of auto companies
in 2015. But Nygren says that
Germany's Daimler is resilient.
Third-quarter sales of its
Mercedes-Benz cars rose 18%
from the year before, thariks
in part to strong U.S. demand.
And cost cutting helps: From
January through September,
earnings per share rose 13%
year over year.
TE CONNECTIVITY (TEL)
$84.25 P/E RATIO: 15.3
MONEY.COM
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1ill
INVESTOR'S
GUIDE 2016
PART2
TOOLS
ARIELAPPRECIATION(CAAPX)
102 1
MONEY.COM
'11
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THE PICKS
BRISTOW GROUP (BAS)
$26.50 P/ ERATIO: 10.1
You need to believe in an
oil-price rebound to invest
in energy firms these
days-but not so to buy this
stock, say Rogers and Fidler.
Bristow flies helicopters
for the global offshore oil
industry, taking workers
to and from rigs. Clients
have cut spending, but the
company gets 60% of its
contracts' value even if its
helicopters don't fly. And
Bristow is reducing its
KENNAMETAL (KMT)
$25.75 P/ ERATIO: 15.0
Shares in Kennametal, which
makes small industrial parts
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PICKS FROM THE PROS
THE PICKS
TJX COMPANIES (TJX)
$70.75 P/E RATIO: 19.6
ELIZABETH JONES
IC3J
CHIPOTLE MEXICAN
GRILL (CMG)
$548.00 P/ ERATIO: 32.2
This chain's stock fell
hard in 2015, a result of
slower same-store sales
growth and an E. coli
outbreak. But Jones says
people still want to eat
healthy, and Chipotle,
which touts organic
ingredients and responsibly raised meats.
feeds that demand.
As for growth,
Chipotle could as much
as double its store count
in the U.S., says Bradley
Angermeier, a Buffalo
analyst. The impact of E.
coli on sales will go away
AKORN (AKRX)
$35.75 P/E RATIO: 15.2
Last year this generic
drug maker revealed it
had overstated 2014
revenue and pretax
income by about
$35 million-a discrepancy linked to drugcompany acquisitions.
Akorn's stock is down
37% since then. Anew
chief financial officer
joined in October, but a
corrected 2014 report
won't arrive before
March. That makes the
stock a risk, but Jones
notes that Akorn has
not restated its cash
balance-a better indication, she says, that its
business is sound.
Akorn specializes
in producing generic
versions of hard-tomake drugs, and
prospects are good.
Last year. Akorn got the
. government okay to sell
11 new drugs, and the
company has another
78 products awaiting
approval. Analysts
expect earnings to
jump 21% in 2016.
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