By Anna Prior
For value investors – the stockpickers who seek and buy stocks at what they hope are prices lower than the true value of the company – these are heady days. Ariel Investments, a value-oriented mutual fund firm in Chicago with $5.5 billion in assets under management, fits solidly into this group. These days, they’re buying. “We have looked at the portfolio and we’ve made some changes to take advantage of what we’re seeing,” says Tim Fidler, manager of several Ariel portfolios including the firm’s Ariel Appreciation fund.
To make Fidler’s watch list, a company must have a proven track record – and be particularly battered in the sell-off. Here are two:
Accenture (ACN). The technology information service provider saw its price fall 10% yesterday on fears of its heavy exposure to Europe. But with lots of cash on the balance sheet, no debt, and proven track record throughcycles, “this is a company that clearly will make it through this period without much duress or stress,” says Fidler.
Interpublic Group of Companies (IPG). The New York-based group of global advertising agencies has faced a 40% decline in its stock price from earlier this year. “That’s a fairly dramatic move in light of the fundamentals,” says Fidler. Investors remember the firm’s weak balance sheet of 2008 and 2009, but today the company is much healthier, says Fidler, pointing to about $2 billion in the company currently holds and recent share buybacks as positive signs.