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Tar Heel Stock-Picking: National Oilwell Varco, Atwood Oceanics

Here's a look at the University of North Carolina's Applied Investment Management program's best-performing stock holdings.

While the Tar Heels may be a best known college basketball program, there's another team at the University of North Carolina at Chapel Hill that's worth looking at.

UNC's Applied Investment Management (AIM) program enables the school's best and brightest MBAs to mange over $1 million in real

capital. Here's a look at how the AIM class of 2008 picked their best-performing stock holdings.

AIM Quick Facts

Established: Early 1950s

Membership: 24

Money under management: $1.9 million (approximate current value)

Benchmark: S&P 500

Number of holdings: Approximately 35 equity names

Time-horizon: Long-term, appreciation

According to AIM student Tom Shohfi, UNC's AIM program is one of the oldest student-run investment funds in the country. The program's original fund, the aptly named Reynolds Fund, was started with "tobacco money in the early 1950s."

The class of 2008 managed two funds in the AIM program (the Reynolds Fund and the Cherry Hill Fund), valued at just over $1.3 million.

While other schools sometimes allow students to use

margin in their programs, this past year, AIM's managers were forced to use a vanilla

long-only strategy. "We're not allowed to use

leverage and we're not allowed to go

TheStreet Recommends

short with our current rules," explains Shohfi.

Shohfi adds, "The fund can only apply leverage through the use of

derivatives and that's limited to two times the assets under management."

"At the current point in time, being a long-only fund is one of our weaknesses, but we're making changes based on how other student-run funds are changing and based on how the industry's changing," says Shohfi.

Next year's AIM class will be allowed to short. (For more on shorting, read "

How to Beat the Street: Short-Selling


Even with the fund's limitations, the Tar Heel money managers were able to keep market meltdowns at bay, since they took control of the fund last April -- one of the toughest 12 months investors have seen in a while. One of the biggest ways they managed that was by making good market bets that paid off.

Where is their money now?

Don't Count the Financials Out This Year


aside, AIM sees a future in financial stocks over the next six to nine months. "We do like the financials," says Shohfi, "and we established positions in some really beaten down companies that we think can rally significantly." With the financial companies, Shohfi acknowledges that "there's a lot of room for upside because there's certainly been a lot of downside."

Financial names the AIM students like include


(BBT) - Get BB&T Corporation Report



(ETFC) - Get E*TRADE Financial Corporation Report

-- two stocks that are up over 20% since January.

But despite those impressive numbers, financials were not what fueled AIM's portfolio performance.

AIM's Top 5 Gainers

1. National Oilwell Varco (NOV) - Get National Oilwell Varco, Inc. (NOV) Report and 2. Atwood Oceanics (ATW)

Shohfi and company felt that investing in two oil-centric businesses, such as National Oilwell Varco and Atwood Oceanics was bound to be a good play. And over the past year, it certainly has been. The value of AIM's National Oilwell Varco position is up around 63% and its Atwood Oceanics stake is up around 42%.

"Oil has risen nearly 70% since we took over the fund," notes Shohfi. But with oil lingering around an all-time high, energy is making AIM students a little nervous these days.

"We feel

energy has played out, says Shohfi. "We have trimmed

AIM's energy holdings, but will likely preserve full portfolio weightings in both these names

National Oilwell Varco and Atwood Oceanics. Rigs and exploration were our favorite theme."

3. Nokia (NOK) - Get Nokia Oyj Sponsored ADR Report

What was one of the key drivers behind AIM's position in Nokia (which is up 34% for the fund)?

The student stock-pickers were impressed by Nokia's international presence. According to Shohfi, 40% of the cell phones in India are Nokias and the company's position in the rest of Asia is just as significant. "

Nokia has done very well versus the


and even the



iShares MSCI Emerging Markets Index Fund

(EEM) - Get iShares MSCI Emerging Markets ETF Report

and has crushed its peer




However, with AIM's Nokia position up 34% return, the group is now taking a second look the company's broader sector. "At this point, we are considering alternatives as many 'high fliers' in tech have since

sold off and may offer more attractive entry points."

4. America Movil (AMX) - Get America Movil SAB de CV Sponsored ADR Class L Report

The Tar Heel investors' interest in mobile phones extended to Latin America.

One of the things that made Mexico-based America Movil stand out for the AIM (up 25% for the group) was its impressive 20% sales growth. "Compare




(VZ) - Get Verizon Communications Inc. Report

, which grew its

sales by single digits," says Shohfi. (America Movil is also owned by

Ohio State University's Student Investment Management program



Mergers were one of the things that made AIM take a look at investing


the NASDAQ, not just



"NASDAQ has one of the world's best electronic platforms," says, comparing the exchange to competitors like

NYSE Euronext



CME Group

(CME) - Get CME Group Inc. Class A Report



(ICE) - Get Intercontinental Exchange, Inc. (ICE) Report


Shohfi adds, "Through our holding period, it has outperformed all three

of its competing exchanges."

So far, the value of AIM's NASDAQ holding has increased 22%.

The AIM Class of 2009

On April 30, the AIM funds were handed over to a new class of UNC MBA students


augmented so that the assets under management now total $1.9 million. What will be AIM's best-performing investments over the next 12 months? To find out, stay tuned to


Jonas Elmerraji is the founder and publisher of, an online business magazine for young investors.