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Value Manger Finds "Growth at a Discounted Price"

Posted Sep 29, 2009 03:49pm EDT by Peter Gorenstein

Stocks aren't as cheap as they once were but there's plenty of buying opportunities, even for a value manager. Thanks to ultra-low interest rates and money on the sidelines, risk appetite for stocks has further potential to grow, says Kent Croft, founder of Croft-Leominster, a Baltimore-based management firm with about $650 million in assets.

I know what you're thinking: he's talking his book. Maybe.  But his track record is solid.

The Croft Value fund is up more than 30% this year and one of the top performers in its category in the 3- 5- and 10-year timeframes, according to Morningstar.

What's he buying?

Croft says the stocks he likes fall into the category of "growth at a discounted price."

Top of his list:

  • Cisco:  He says the company's earnings visibility and prospects are as good as ever.  Yet, with a multiple comparable to the broader market, it's a bargain compared to prior years.
  • Health-care Rather than parking money in a savings account, he's a fan of a few stable dividend yielding stocks.  He likes Johnson & Johnson which is currently yielding over 3% and Merck with a dividend closer to 5%.

 

77 Comments

Pym
Pym - Tuesday September 29, 2009 04:02PM EDT

blah blah blah .. how many was can they say stuff that just doesn't make sense ..

Michael
Michael - Tuesday September 29, 2009 04:10PM EDT

yawn

Yahoo! Finance User
Yahoo! Finance User - Tuesday September 29, 2009 04:15PM EDT

..When opportunity knocks, we're got headphones on

Yahoo! Finance User
Yahoo! Finance User - Tuesday September 29, 2009 04:15PM EDT

I'd turn off that "Yahoooooooo" schtick at the end of the videos. It sounds too _____ for stocks and you'd hate to have other people hear that in the office.

2112
2112 - Tuesday September 29, 2009 04:22PM EDT

checkmate king 2, over, check mate king 2 over....

taopraxis
taopraxis - Tuesday September 29, 2009 04:33PM EDT

The main problem with stocks is the same as with the money, i.e., dilution. There is just no limit on how much stock the bankers can print. Stocks have other problems, too, e.g., greedy and costly executives, dubious accounting, the economic *depression*, surprise losses and/or dividend cuts, market crashes, no growth decades, etc. Stocks are a world class sucker play.

Yahoo! Finance User
Yahoo! Finance User - Tuesday September 29, 2009 04:35PM EDT

Mr. henrygoldfarb101 you are trying to hard to pump and dump. If you wait a few years you will be back to breakeven on your VRNM.

Justin
Justin - Tuesday September 29, 2009 05:30PM EDT

Kent Crost = Another Wall Street Crony Here's why... "still a lot of money on the sidelines." That's bullshit and he knows it. For every buyer there is a seller so they net each other out. I have money on the sidelines, so if I buy a stock, I'm buying it from someone who already owns it so the purchase on my side and the sell on his side cancels one another out. He just wants to sell his stocks at higher prices.

Yahoo! Finance User
Yahoo! Finance User - Tuesday September 29, 2009 04:38PM EDT

IF ANY COMPANY HAD THE DEBT THE GOVERNMENT HAS, WITH THE FUTURE PROSPECTS OF" SLO TO NO ".GROWTH.. they would be put on the suicide watch list.

Yahoo! Finance User
Yahoo! Finance User - Tuesday September 29, 2009 05:56PM EDT

why not a " HOUSING PUBLIC OPTION",if you cant afford your home if forclosure is imminent,THE "HOUSING PUBLIC OPTION" SHOULD BE .....YOU SIGN OVER THE PROPERTY TO "HUD".they have biggg pockets,'HUD "GIVES IT TO YOUR LOCAL HOUSING AUTHORITY.YOU AND YOUR FAMILY STAY PUT,, JUST PAY YOUR LOCAL HOUSING AUTHORITY "THE SAME AS OTHERS ".pay its a win win, less street people, no more donut hole"FOR AMERICANS"..,HEY "CONGRESS" HOW ABOUT THE REST OF YOUR CITIZENS.HOW ABOUT SOME" HELP FOR ALL"OR IS PUBLIC HOUSING ",JUST FOR SOME AMERICANS,,,"ALL MEN ARE CREATED EQUAL"".so practice what you preach..

just a man
just a man - Tuesday September 29, 2009 04:50PM EDT

The question is can we trust a manger?

sensey
sensey - Tuesday September 29, 2009 05:58PM EDT

Hmm ... let's see - CLVFX - 24% return YTD, but has jumped 71% from the March bottom, not too shabby; plus it's only got $114m under management so he can be nimble... the question you have to ask is: do you think there's any upside left given the current situation? If you believe the situation is improving (as Bernanke and Barry say it is), then you could park cash here. Melia would classify this as "aggressive value"...

Dennis
Dennis - Tuesday September 29, 2009 04:51PM EDT

This is what I like about yahoo finance.com , YOU LET EVERYONE SPEAK??? Not like huffpo !!!!! checkout http://idontagree.com/huffington-post-censorship-pol-319.html they only want to hear themselves

JoeB
JoeB - Tuesday September 29, 2009 05:12PM EDT

Here we go again with the Verenium Crap. They suck, have you seen their stats?

ahmad
ahmad - Tuesday September 29, 2009 06:12PM EDT

hi

Red W. Blue
Red W. Blue - Tuesday September 29, 2009 05:19PM EDT

It is the Slock Market or the Stock Market?????????? We all know the answer!

Yahoo! Finance User
Yahoo! Finance User - Tuesday September 29, 2009 06:19PM EDT

Well, let me tell you. Because of the Tsunami in Samoa, I just bought 100,000 shares of Verenium. There is going to be so much bio-trash floating around, those little enzymes are going to be needed to clean it up. I am going to be on the beach smoking cigars with smoking hot chicks in 6 weeks. And, I am doing it all through snail-trader.com. BAM!

sensey
sensey - Tuesday September 29, 2009 06:20PM EDT

just a man 4:50PM EDT "The question is can we trust a manger?" //////// ///////// Aw, jeez, yeah -- c'mon, Yahoo, doesn't anyone check their work before they send it to the web? Croft will certainly be "away in a manger" if he isn't a better "manager." /////// //////// Here's a tailor-made opportunity for Melia to slam the feeble US education system and the poor excuses that graduate from it ... but nah, it's too easy, been there, done that...

Yahoo! Finance User
Yahoo! Finance User - Tuesday September 29, 2009 06:21PM EDT

September 29, 2009 4:47 PM EDT NEW YORK - Former Democratic fundraiser Norman Hsu was sentenced to more than 24 years in prison Tuesday by a judge who accused him of funding his fraud with a "conniving use of the political process."

Nick
Nick - Tuesday September 29, 2009 06:27PM EDT

What's happening with Tech Ticker? They are actually starting to give airtime to some people that are bullish on the future of equities. I recall that from April through August they were marching-out people on a daily basis that had nothing but negative sentiment about stocks. Everythong was saying, "This is nothing but a dead cat bounce", or "Sell in May and go away". Henry B was saying..."Oh yeah...and don't count on those double digit annual returns anymore from stocks. It's going to be more like 7% a year if you're lucky." Right on Henry! This market is up 56% in 6 months time and you were warning everyone that it would be a snail's pace of 7% every 12 month AFTER you add in the dividends.

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