We asked eight up-and-coming and top mutual fund managers what one stock they would buy now. Some of their recommendations are household names. Others might surprise you.
Use the navigation at the right to scroll through our slide show to see if you would like to add these managers' picks to your portfolio.
By Elizabeth Ody, Andrew Tanzer and Jeff Kosnett
Compiled by Cameron Huddleston
THE ONE STOCK THEY WOULD BUY
MANAGER: Bob Auer, Auer Growth Fund (AUERX)
STOCK: Noble Corp. (symbol NE)
Bob Auer recently launched Auer Growth with his father, Bryan. The pair already have a remarkable record managing Bryan's retirement account, which returned an astonishing 30% annualized over the past 20 years through the end of the third quarter of 2007.
Auer says of Noble: This is an offshore driller that operates deep-water rigs for $600,000 a day. If oil dropped to $20 a barrel, it wouldn't hurt Noble because it has contracts with some of the richest companies in the world -- such as Chevron, Exxon and Petrobras -- that have locked in record earnings for the next five years.
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THE ONE STOCK THEY WOULD BUY
MANAGER: Susan Byrne, WHG LargeCap Value Fund (WHGLX)
STOCK: Nike (NKE)
This experienced value-oriented investor looks for stocks others misundertand. WHG LargeCap Value is a relatively new fund, but Byrne has a proven track record with Westwood Equity fund.
Byrne says of Nike: Nike has shown consistent revenue growth over the last several years and has leveraged growth from China and Latin America to consistently improve its margins. Nike products will be displayed prominently at the upcoming Olympics. And the company's entree into soccer, through the recent acquisition of Umbro, is another avenue of growth that has worldwide implications.
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THE ONE STOCK THEY WOULD BUY
MANAGER: Neil Hennessy, Hennessy Focus 30 (HFTFX)
STOCK: Exxon Mobil (XOM)
This well-known manager runs his own shop, Hennessy Funds, using a quantitative screening process that recently has put his Hennessy Focus 30 fund at the top of the charts now.
Hennessy says of Exxon Mobil: This is just a very well managed company that's in the right place at the right time. I'm not saying that the price of oil will necessarily go up, but Exxon will survive. It has plenty of room to raise its dividend and the capital to expand if the government opens up offshore drilling.
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THE ONE STOCK THEY WOULD BUY
MANAGER: Tom Laming, AFBA Science & Technology Fund (AFATX)
STOCK: Cisco (CSCO)
This former spacecraft engineer's fund has beaten its peers over the past five years.
Laming says of Cisco: It is so well-positioned after purchasing Scientific Atlanta. Cisco's benefitting from a long-term trend that's already well under way, and that's the constant and prevalent spread of semiconductor technology.
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THE ONE STOCK THEY WOULD BUY
MANAGER: Jim Moffett, UMB Scout International Fund (UMBWX)
STOCK: Canon (CAJ)
Moffett has 35 years of investment-management experience. Since 1993, he has managed Scout, which is in the top 10% of overseas funds that focus on large companies with a blend of growth and value attributes.
Moffett says of Canon: We view Canon as a broad-based Japanese technology play because, if you look at the numbers, Japan has been one of the best markets this year. Also, Canon’s products are diverse. We usually only think of them as making cameras, but they also make copiers and equipment for semi-conductors.
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THE ONE STOCK THEY WOULD BUY
MANAGER:John Osterweis, Osterweis Fund (OSTFX)
STOCK: Valeant Pharmaceuticals (VRX)
Osterweis's fund has delivered 11% annualized over the past ten years, beating the Standard and Poor's 500-stock index by an average of eight percentage points per year.
Osterweis says of Valeant: Valeant Pharmaceuticals is a global pharmaceutical company that specializes in products for neurology, infectious disease and dermatology. New management is focusing the company’s activities in fewer drugs and fewer geographies, which should enhance the company’s returns. Valeant also recently completed two successful trials of its leading drug prospect, Retigabine, and plans to file its new drug application with the Federal Drug Administration this year. This drug could help turn the somewhat sluggish firm into a growth company.
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THE ONE STOCK THEY WOULD BUY
MANAGER: Suzanne Stepan, Utopia Growth Fund (UTGRX)
STOCK: Nalco Holding Co. (NLC)
Stepan has been managing Utopia Growth since it was launched in 2005, but she has more than 16 years of investment management experience.
Stepan says of Nalco: Nalco is the world's largest water-treatment company. It has a new chief executive who has been implementing restructuring initiatives that should result in margin expansion over time. Plus, there is a long-term tailwind in the global water treatment market. Water is the world's blue gold and is becoming more at risk.
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THE ONE STOCK THEY WOULD BUY
MANAGER: Robert Stimpson, Black Oak Emerging Technology Fund (BOGSX)
STOCK: Cognizant Technology Solutions (CTSH)
Stimpson has more than 11 years of investment experience and manages two other funds for Oak Associates Funds.
Stimpson says of Cognizant: Cognizant supplies IT services to Fortune 500 companies around the world. It's particularly successful during a recession because big companies, especially financial firms, tighten their purse strings. The stock has fallen in large part due to guilt by association with trouble in the financial services industry.
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