It is one of the few ironies that work in our favor: For more than 100 years, we have commemorated
Labor Day by refraining from labor.
But even as we fire up the grill, drive to the beach or head to the megaplex for one more weak summer blockbuster, many investors quietly labor over a nagging question: Do any stocks look good right now?
For those among us who spend the holiday trolling the Web, we culled answers on which stocks look good from our recent "10 Questions" interviews.
We hope readers are rewarded for their labors.
Donald Yacktman, Yacktman Funds
is our largest holding.
Tyco has real businesses. And it got down to a price that finally tempted us. Our average cost on Tyco is in the single digits. We did not pay up for Tyco. By the time we bought it,
former CEO Dennis Kozlowski had already been out or was virtually out. We only bought this over the last couple of months.
So they were going to change managers -- that's number one. And number two: They were going to sell off
, which gave them cash to pay off their debt.
And as I said, they have legitimate businesses there. There are things like
, and those are all good businesses. These are not fly-by-night operations here. This is not Enron.
The second one is a company we've owned for a couple years now:
. Lancaster is a fabulous business -- an underappreciated, good business. The company has had 39 years of rising dividends. About 75% specialty foods, with the rest being candles and glassware. The family owns 25% of the company. Virtually no debt. They buy back shares and make synergistic acquisitions.
Todd Ahlsten, Parnassus Equity Income
We found increasing opportunities in semiconductors and semiconductor capital equipment, which have come way down in valuation. We found great opportunities in pharmaceuticals and pharmaceutical distribution.
We found value in
. We think these are great companies that have good balance sheets, good cash flow, we trust the accounting. We trust management, and they're businesses that have bright futures at cheap prices. We've added to those aggressively.
One of my favorite investments is the No. 2 holding:
, the big drug distributor. They were a former client of Arthur Andersen. About a month ago, when they were going through a transition to their new auditor, there wasn't a partner to sign their previous documents because Andersen was being dissolved. As a result, the stock traded down $15 a share on that. Cardinal is a remarkable company with remarkable cash flow, so we used that as an opportunity to aggressively buy Cardinal shares.
Craig Callahan and Robert Straus, Icon Info Tech Fund
. It's one of our largest holdings, and it's held up real well in a tough environment this year. It's up 11% year to date, and we've owned it for about a year now. We started accumulating it at around $15 when, based on our model, it was extremely cheap and a real bargain.
is another name in the entertainment-software group that is fairly heavily weighted in our fund. It hasn't done quite as well as Take-Two, but again relative to the way other stocks have been doing, it's held its own in the year.
Over in the electronic equipment and instruments sector, the name that stands out is
Global Imaging Systems
. That particular name is up 25% year to date. We started accumulating it around the $15 to $18 level.
, which is a security software company. We've accumulated that going all the way back to early January 2001, with our average cost right around $31, and it's trading at $34.80 -- that's up almost 4% year to date. Those are the areas primarily that have helped us avoid a significant portion of the downward spiral in tech.
Ivan Arteaga, Gabelli Global Telecom
Regional bells are always good companies, and they are selling at a good price. Some of the foreign incumbents also look good, such as
is No. 1 or No. 2 in just about every one of its markets. The stock is trading at a price that implies a valuation that means you can buy the company at less than six times EBITDA.
David Herro, Oakmark International
We have decent weightings in Mexico and Brazil, especially Mexico. Again, it's based on value. Companies like
, when we first bought into them a year and a half or two years ago, were selling at almost all-time lows -- at crisis lows from a valuation perspective. And these are wonderful businesses; well-run in growth markets.
Televisa is one of the leaders in both content and broadcasting. And Femsa does beverages. Two very solid blue-chip companies that have made money through thick and thin. We still own them. They were 60% to 70% undervalued. Now they're 30% to 40% undervalued. They have moved, but we still like the stocks.
In Brazil we own a bank called
. It's a great financial institution, very profitable and very well run. It's in Brazil, so it's low right now.