This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Skechers or Smuckers, It's Value Stocks' Time

NEW YORK (TheStreet) -- Value stocks have grossly outperformed growth stocks this year, and that comes as little surprise to Malcolm Polley, portfolio manager for the Stewart Capital Mid Cap Fund (SCMFX), who says the economic downturn is making investors more price conscious than ever.

The $21 million fund, which garners four stars from Morningstar (MORN), has returned more than 13% over the past year, better than 70% of its rivals. Over the past three years, the fund has returned nearly 20 basis points annually, better than 93% of its peers.

Welcome to TheStreet.com's Fund Manager Five Spot, where America's top mutual fund managers give their best stock picks and views on the market in a five-question format.

Why are value stocks the better bet right now?

Polley: From our perspective, value stocks make a lot of sense simply because you are focusing on how much you pay for something. And in the uncertain environment we have been in over the last couple of years, where principle preservation seems to be the key, focusing on how much you pay for something makes a lot of sense.

One stock you like is Skechers (SKX). Why is this a value stock now?

Polley: We have not liked retailers for a long time. But Skechers offers a very strong value proposition. You can go in and find a similar shoe that is much more expensive that essentially Skechers has copied. Shape Ups is a great example. It's probably their biggest seller. If you go into a shoe or sneaker store and ask them what their top seller is, it will likely be the Skechers Shape Up.

Another stock you like is J.M. Smucker (SJM). Why the jam maker?

Polley: They have done a fantastic job of integrating acquisitions. The Smuckers family still has a sizable stake, so they have skin in the game. The acquisition that we were most [struck] with was the International Multifood acquisition of a couple of years ago. They did a wonderful job of integrating what had been an underperforming business.

Banks have been under pressure recently. You like Northwest Bancshares (NWBI). Why?

Polley: Northwest Bancshares is what you call a second-stage deconversion. They were converting from a mutual holding company to a stock company. We had the opportunity to buy the stock at below tangible book value, which means all the good will has been taken out. In other words, we got it at a great price point. They have a wonderful footprint throughout the North Atlantic area. They have done a lot of acquisitions over the last five or six years. They continue to do acquisitions, and they have a lot of capital to do so.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,937.62 +18.03 0.11%
S&P 500 1,981.95 +0.35 0.02%
NASDAQ 4,520.3280 -7.1860 -0.16%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs