Frank Fund Finds Deals in Drug Stocks
The $2 million fund has risen 51% during the past year, better than 83% of its Morningstar (MORN) mid-cap blend peers. It has gained 4.3% annually, on average, during the past five years, outperforming two-thirds of competing funds.
Welcome to TheStreet's Fund Manager Five Spot, where America's top mutual fund managers give their best stock picks in five fast and furious questions.
Are you a bull or bear?Frank: I am extremely bullish on our portfolio, not necessarily the market as a whole. I think too many investors base their confidence on the economic outlook instead of the individual valuations of their holdings. For example, in 2009, long before there was any sign of an economic recovery, our portfolio enjoyed an incredible rally. This was because our stocks were cheap. Now, while the outlook for the U.S. is cloudy, there are still phenomenal bargains in companies that will outperform the recovery, if you know where to look. What is your top stock pick? Frank: Our top pick is WellCare Health Plans (WCG). This is a small health care company that went through some big problems, but now all their issues are resolved. It's a sub-$40 stock with $30 of cash per share that churns out $5 per year in free cash flow. Of course, when owning health care you must be aware of government regulation, but we think WellCare will actually benefit from the government forcing people into the system.
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