Where Is Saul Pannell's 'Go Anywhere' Approach Leading Him?

I am finding good opportunities among some of the well-positioned pharmaceutical stocks, as well as among health-care services stocks that have recently come under pressure due to a combination of sector rotation, resulting from profit-taking and rising health-care costs. Within consumer discretionary, I like media stocks on the belief that these stocks are attractively valued today and will participate in economic recovery, as companies once again begin to spend on advertising.

3. You have mentioned that you look in growth and value, with an eye on making 25% or more over the next 12 months. How do you assess a company's prospects in this difficult environment? What key measurements do you apply?

In general, I have a value bias, but I will buy both growth and value stocks seeking to invest in companies that are obscure and controversial. Valuations matter to me; I am not a momentum investor and will only invest in those companies where the business models, fundamentals, management teams and valuations make sense. It is difficult to place one set of criteria on all companies.

Some of the factors I look at are free cash flow, the health of the balance sheet and meeting the management teams of every company I invest in to ensure that I am comfortable with their ability to steer the company in the future. In addition to conducting my own research, I leverage the resources of Wellington Management's central research department, seeking input from the analyst covering the stock to gain further insight.

4. Can you provide a good example of a value play in your fund and a good example of a growth play, and elaborate a bit on the prospects of both stocks?

An example of a value play in the Fund is Samsung Electronics, which is a manufacturer of DRAM memory chips, cell phones, flat panel displays and other enabling technologies.

As Samsung becomes increasingly recognized as a consumer electronics company, we expect its valuation multiple to expand. Samsung currently trades at only eight times earnings with solid historical profitability and a relatively strong balance sheet.

An example of a growth play is Nextel Communications(NXTL Quote), which is a provider of wireless communication services.

Nextel is exhibiting greater growth and lower subscriber "churn" then the other nationwide wireless providers. Nextel's service offering is differentiated by its "direct connect" walkie-talkie feature, which has gained traction in the business and government customer channels. Nextel's increasing exposure to the government channel makes it a beneficiary of recent homeland-security legislation.

Pannell's Progress Under Saul Pannell, Hartford Capital Appreciation has outpaced the S&P 500 in each of the past six years, except 1998. Included is the fund's percentage rank among peers. (1%=best; 100%=worst)

Source: Morningstar.