Five Experts Name Their Favorite Investments

We asked top-notch analysts and fund managers for their best investing ideas.

For Kiplinger's editors' favorite investments, see our slide show of the Best Stocks and Mutual Funds.

FAVORITE FOREIGN STOCK

Wendy Trevisani, Fund Manager

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Trevisani, co-manager of Thornburg International Value fund, predicts that Danish drug maker Novo Nordisk, one of the world's leading producers of insulin, will benefit from an increase in diabetes treatment. The company's synthetic-insulin products, which include prefilled injection pens, permit better management of blood-glucose levels and sell for more than human insulin.

Novo's earnings have grown at a robust 22% annual pace over the past five years. "We see that growth continuing for many years," says Trevisani. At $113, Novo Nordisk's American depositary shares (NVO) trade at 21 times estimated 2007 earnings of $5.40 per share.

FAVORITE EXCHANGE-TRADED FUND

Ron Rowland, Editor

The author of All Star Fund Trader newsletter favors Powershares Value Line Industry Rotation Portfolio (PYH). It tracks an index that favors industries with the highest Value Line timeliness rankings, and stocks within those sectors that have the highest timeliness rankings. "Every market move has sectors that lead and sectors that lag," Rowland says.

FAVORITE FUND

Jack Chee, Analyst

An analyst with No-Load Fund Analyst newsletter, Chee admires the intensive research process employed by Bill D'Alonzo and his team at Brandywine Blue (BLUEX) to uncover hidden gems. The fund invests mainly in large, fast-growing companies. "Brandywine's diligence gives it an edge in finding out what Wall Street hasn't," says Chee.

FAVORITE BIG-CAP STOCK

Susan Byrne, Fund Manager

Byrne, who runs WHG LargeCap Value, among other mutual funds, likes insurance giant American International Group's global footprint, which includes strong positions in emerging markets. And she loves the price. At $65, the stock (AIG) trades at only ten times estimated 2007 earnings and 1.5 times book value.

FAVORITE SMALL-CAP STOCK

Jim Larkins, Fund Manager

The pilot of Wasatch Small Cap Value likes good companies that have been given up for dead. The stock of mattress maker Select Comfort has stagnated in a weak housing market. But Larkins likes the business model: Customers pay in advance, so little cash is tied up in inventory and accounts receivable. The stock (SCSS), at $16, trades at a price-to-sales ratio of less than 1.

KIPLINGER PICKS: The Best Stocks and Mutual Funds