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Funds shun large-cap business cycles

- Alan Lavine and Gail Liberman

Conventional thinking is that large company growth stocks have underperformed medium company and small company growth stocks for the past few years. So they're due.

But Bill D'Alonzo, chief executive officer and manager of the top-rated Brandywine Fund and the Brandywine Blue fund, is one expert who's not necessarily banking on this. Both of his funds aim to buy fast-growing companies at reasonable prices. They invest based on earnings and stock prices.

The average holding in his Brandywine Fund is growing earnings at 24 percent this year, he says. By contrast, blue chip companies are growing earnings at just 11 percent.

Over the past five years, the Brandywine Fund has grown at a 9.6 percent annual rate. The Brandywine Blue Fund has grown at 9.83 percent annual rate.

Stocks Alonzo favors:

  • Lowe's Companies rather than Home Depot. Reason: Lowe's is expanding business by opening new stores at a time when Home Depot isn't.
  • Technology stocks, particularly Techtronix. This company makes equipment used to design, test, deploy and maintain next generation communications networks.
  • Mobil Mini. This company leases refurbished shipping containers for storage space.
  • Precision Castparts. A maker of nuts, bolts, rivets and other basic materials.
  • Emerson Electric. This company is reaping profits from its analytical instruments, valves and system controls to control the flow of fluids. Other business segments doing well include the fan and compressor operations.


Spouses Gail Liberman and Alan Lavine are syndicated columnists. Their latest book is "Rags to Retirement (Alpha Books)." You can e-mail them at MWliblav@aol.com.

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