BOSTON ( TheStreet) -- As mutual fund managers pile into so-called defensive stocks to shield clients from an accelerating decline in prices, the RidgeWorth Large-Cap Growth Fund's ( STCAX) Michael Sansoterra is buying up highfliers that have crashed down to Earth, including Priceline.com ( PCLN) and Allergan ( AGN).Professional investors have been touting large-cap, dividend-paying stocks as the best way to ride out the storm in equities. With the S&P 500 down 8% this year and more than 15% since the end of April, they've fled speculative companies for those with steady revenue and dividends. Sansoterra isn't among them.
BE Aerospace ( BEAV) Company Profile: BE Aerospace is a provider of products and services for the commercial, business jet, and military-aircraft markets. Current Share Price: $33.50 (Sept. 30) Sansoterra's Take: BE Aerospace is a smaller-cap stock on a relative basis for the RidgeWorth Large Cap Growth Fund, as the company has a market cap of about $3.5 billion. Sansoterra likes BE Aerospace because of the cyclical growth story. Sansoterra notes that, during the height of the financial crisis, airlines were grounding planes and parking them in the desert. Many were older planes that were less fuel-efficient. These planes were used for parts as planes in the fleet needed repairs. With the economy slowly recovering, Sansoterra is expecting BE Aerospace to be a big benefactor as people fly more and more. "Aerospace is a later cycle play because airlines struggle and they underspend on planes," he says. "Earnings estimates on companies like BE Aerospace were coming down drastically in early 2009. Now, the companies in the industrial space had more of a chance to beat expectations. There have been a lot of additional content added to make flights more interesting and comfortable. This retrofit business is picking up and, at the same time, there is a wide-body set of planes that are slowly being ordered again." BE Aerospace's financial data is reflecting that success already. In the second quarter, revenue rose 25% from a year ago while profit increased nearly 50%. BE Aerospace shares, though, are lagging the overall market, down almost 10% in 2011. However, the stock is up 10% over the past 12 months.
Allergan ( AGN) Company Profile: Allergan is a health-care company focused on consumer products. It has developed cosmetic medicine Botox, chronic dry-eye treatment Restasis, facial-wrinkle gel Juvederm and the Lap-Band adjustable gastric banding system. Current Share Price: $83.63 (Sept. 30) Sansoterra's Take: Allergan is a solid example of all things the RidgeWorth Large Cap Growth Fund invests in. While considered a health care company, Allergan is more about consumer products that are disruptive to the way people live their lives. The key to Allergan as an investment is that people thought consumers would cut out the cost of Botox, Sansoterra says. "We found that, through the difficult economic environment, Allergan grew revenue and earnings through the downturn at a healthy pace. Not everyone quit their Botox injections." What makes Allergan a real growth story is how the company has found new uses for Botox beyond cosmetic applications. Already, Botox is being used to treat migraines and urinary incontinence, among other things. "There are lots of uses for the compound beyond cosmetic use," Sansoterra says. "That's allowed the total addressable market for Allergan to get larger and larger. The company has stayed well positioned in the higher-end consumer base, which is great from a consumer discretionary standpoint. In doing so and expanding that to other industries, Allergan can continue to grow their core base and they have other tangential markets that never existed before."