This Day On The Street
Continue to site
ADVERTISEMENT
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

Funds That Can Shine During Washington's Deadlock

Early this year, the fund bought Coach (COH) after the handbag maker reported disappointing sales during the holiday season. While some of the company's lines flopped, sales remained strong in key markets such as China, says Kessler. Coach continues to maintain very strong returns on equity and a rock-solid balance sheet.

A low-risk choice is FAM Value. While the fund often trails peers in bull markets, it topped the average mid-growth competitor by 15 percentage points in 2008. The fund managers seek growing companies with strong cash flows. The aim is to buy when the shares sell for discounts to the fair values.

In recent years, the fund has been buying property and casualty insurers. Profits were hurt as companies lowered premiums in a bid to gain market share. But now the destructive price competition is abating as the industry moves into a cycle of rising premiums, says FAM portfolio manager John Fox. In addition, rising interest rates are boosting bottom lines. This is happening because the insurers invest much of their cash flow into bond portfolios. When rates climb, the bonds provide more income. "The companies will earn more on their assets," says Fox.

An insurance holding is Markel (MKL). In the past, the stock has sometimes sold for 1.5 times the book value. But the shares currently trade for around 1.1 times book.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Stan Luxenberg is a freelance writer specializing in mutual funds and investing. He was executive editor of Individual Investor magazine.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
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!
SYM TRADE IT LAST %CHG
AAPL $132.59 1.80%
FB $82.16 0.77%
GOOG $555.34 -1.70%
TSLA $235.10 7.60%
YHOO $44.66 0.31%

Markets

DOW 18,113.11 +32.97 0.18%
S&P 500 2,119.34 +1.65 0.08%
NASDAQ 5,090.4830 -1.6020 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs