Editor's Note: Arne Alsin's column runs exclusively on RealMoney.com; this is a special free look at his column. For a free trial subscription to RealMoney.com,
Raymond James FinancialSometimes you learn a lot about a company because of what it doesn't do. In the speculative bubble of the late '90s, Raymond James ( RJF) stuck to gathering assets and growing its strong brokerage business. It didn't participate materially in the tech/telco/Internet IPO craze. Even if the equity market has a mediocre decade, I expect this Florida-based company to continue to gather assets at a fast pace while building a force in asset management. This $1.6 billion company is still reasonably valued, generates a lot of free cash flow and has exceptional financial strength. See my
Liz ClaiborneI don't see a lot of risk to Liz Claiborne's ( LIZ) business model. Sales are diversified across a number of brands and channels. This company also has a strong management team, an impressive balance sheet and clean accounting as evidenced by its history of restructuring charges: It has the fewest of any company in its category. There's plenty of
HasbroLike Coke and Pepsi ( PEP) in the soft-drink market, two blue-chip companies control the shelf space in the toy market: Mattel ( MAT) and Hasbro ( HAS). Market share for Hasbro in certain toy areas includes board games (65%), card games (75%) and action figures (60%). Hasbro is a
Millennium PharmaceuticalsI don't have a lot of patience for value players who think singularly in narrow, simplistic terms like low price-to-earnings or low price-to-book ratios. They'll always be investing in companies like Ford ( F) and General Motors ( GM). Those stocks are cheap, to be sure, but given the nature of their businesses, they should be cheap. My latest pick for RealMoney.com, leading biotech company Millennium Pharmaceuticals ( MLNM), is not a value stock in the traditional sense. But I see unrecognized value in a variety of areas, besides the obvious $1.5 billion in net cash. Collaborations and joint ventures with several big pharmaceutical companies are very valuable and will yield well over a billion dollars in future revenue. The product pipeline, though immature, is on par with that of the big pharmaceutical companies. This stock is going to be volatile. But the business model, when it matures, is profitable and protected. Millennium might be a home run, but to get there from here, you'll have to weather a few storms. It closed Tuesday at $20.23, well off its 52-week high of $56.75 set last January. My best guess is that Millennium has the potential to go up 8 to 10 times over the next eight to 10 years.
Note: With this column, I'm changing my rating to a sell for both UAL ( UAL), which I noted in a