'Good' and 'Bad' Stock Picks

Profiting From 'Values'

Now lets look at the "good" fund. The Ave Maria Catholic Values Fund invests in companies that do not violate the core values and teachings of the Roman Catholic Church. The fund's performance has put it in the top half of Morningstar funds, having generated an average annual return of 15%-plus over a five-year period.

One of the stocks that Ave Maria owns is Kinetic Concepts (KCI Quote), a wound care and therapeutic products medical technology company. The company just last week reported a 27% jump in first-quarter earnings due to an increase in both domestic and foreign sales. The stock has a forward P/E of 9 and a PEG of 0.8.

Kinetic shares are also owned by Renaissance Technologies, a New York-based hedge fund managed by Jim Simons. Renaissance also owns shares of the non-socially responsible military aircraft manufacturer Lockheed Martin (LMT Quote). Lockheed's first-quarter earnings were up 5.8% on a 7.6% revenue increase. The stock has a forward P/E of 13, a PEG of 1.3 and a yield of 1.6%.

Another Ave Maria stock is Legg Mason (LM Quote), an investment management company and sponsor of mutual funds. The stock has a P/E of 13, a PEG of 1.7 and pays a yield of 1.6%.

Legg Mason stock is also owned by Basso Capital, a $1.1 billion investment firm that was founded in 1994. Basso also holds shares of Clean Harbors (CLHB Quote), a "green" company that provides environmental services. The company, which is set to report quarterly earnings next week, offers a forward P/E of 20 and a PEG of 1.2.

For more "good" and "bad" stock ideas, check out the portfolios of the Ave Maria Catholic Values Fund and the Vice Fund at Stockpickr.com.