Lehman's Uncommon Values Veer Away From Tech

Alcoa and Harley-Davidson are among the new faves. Juniper, Nortel and other tech names get evicted.
By Yi Ping Ho ,

Unlike last year, the pickings are slim in tech on

Lehman Brothers'

latest "10 Uncommon Values," the queen of all top-10 stock lists.

Instead, some of the best-known names on this year's list include a giant bank and a waste company. The ranking, which has been around since 1949, is compiled from a selection of about 90 stocks that Lehman's analysts think have the best chance of outperforming the

S&P 500 over the next 12 months.

Since its inception, Uncommon Values has outperformed the broader market more than 73% of the time, returning average annual returns of 15.3% vs. the S&P 500's 8.9%.

But last year's tech-heavy list, which included

Juniper Networks

(JNPR) - Get Report

and telecom equipment maker

Nortel Networks

(NT)

, is now underwater. On average, the stocks lost 43.4% over a 12-month period, compared with a 46.2% drop in the

Nasdaq Composite Index and a 16.5% fall in the S&P 500.

This year, said Peter Cardillo, chief strategist at

Westphalia Investments

, "They're certainly looking at a more diversified group, and these are basically good value stocks."

All but one of the stocks on last year's list --

Cendent

(CD)

-- had sharp losses during their year on the list.

"These are all different companies and different industries that we think, for various company-specific reasons, are good candidates for delivering decent investment performance over the next 12 months," Jeff Applegate, the firm's chief investment strategist, said of this year's choices. "The list was concentrated in tech last year, but it was also not a reflection of our strategy or a macro call. It just happened to turn out that way. The process, as far as we know, has always been one of bottom-up stock selection, not top down."

"They're taking a cautious approach," Cardillo said. "They believe the market is going higher, but also that larger-cap, grade-A companies will move faster than speculative ones."

Lehman's 10 Uncommon Values:

Alcoa

Bed Bath and Beyond

Cisco Systems

Comcast

Concord EFS

Harley-Davidson

Liberty Media

Mirant

Washington Mutual

Waste Management

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