Alex. Brown's top picks easily outperform market

January 11, 1992|By Timothy J. Mullaney

The stock market was one of the easiest places to make money during last year's recession. Even so, Alex. Brown Inc. said yesterday that its 1991 stock picks jumped more than 70 percent, thanks to its ability to guess how the market would respond to economic woe.

Brown's Selected Investment Opportunities List, which covers about 20 stocks the firm sees as the market's best of the best, jumped 70.4 percent during 1991.

Alex. Brown executives acknowledge that they rode the wave of a market that was hot at the beginning and end of the year. But they point out that their list made the 26.3 percent jump of the Standard and Poor's 500-stock index look paltry, overshadowed the 20.3 percent climb of the Dow Jones Industrial Average and even outdistanced the 56.8 percent increase of over-the-counter stocks.

"In a recession, you want to invest in a company that will have good earnings even if the economy is slow," said Noreen Frost, co-chair of Alex. Brown's investment committee, which puts together the list each January and updates it each month. "A good growth company will produce those earnings. They're able to provide products and services that save their customers money."

Some of the biggest scores on the list came from drug and biotechnology stocks. Pfizer Inc. was up 108.1 percent for the year, making it one of the two best picks on the list (the other was Shoney's Inc., a restaurant chain). Drugmakers Alza Corp. and Amgen Inc. were also up 93 percent, after being on the list 12 months and six months, respectively, Ms. Frost said.

Among the few losers on the list was International Business Machines Corp., which spiked early in the year but was down 6 percent when it was dropped May 31.

Jami McDonald, an Alex. Brown spokeswoman, said 44 stocks appeared on the list for at least part of the year, with about 20 to 22 on the list at any one time.

Ms. Frost said Alex. Brown is sticking with growth stocks for 1992's Selected Investment Opportunities List. In fact, five companies on this year's list -- Wal-Mart Stores Inc.; Pfizer; Alza; Abbott Laboratories; and Health Care Property Investment, a real estate investment trust -- have been on the list since last January or earlier.

Alex. Brown's 1992 top picks

The following 17 stocks are on Alex. Brown Inc.'s Selected Investment Opportunities List for January 1992. The list is updated monthly, so stocks named below might be replaced.

Name of stock .. .. .. .Close.. .. .. .. .. .. 1991

.. .. .. .. .. .. .. .. 1/10/92 .. .. .. .. .. Range

Income stocks

Federal Realty

Investment Trust .. .. .. $20.50 .. .. .. .. $21-14

Health Care Prop. Inv. .. 48.375 .. .. .. .. 49-33

Special situations

Amtech Corp. .. .. .. .. .. 26.75 .. .. .. .. 29-9

Comair Holdings .. .. .. .. 23.75 .. .. .. .. 24-12

EXEL Ltd. .. .. .. .. .. .. 37.875 .. .. .. .. 38-27

Foundation Health .. .. .. .41.875 .. .. .. .. 36-11

Hewlett-Packard .. .. .. .. 58.50 .. .. .. .. 57-30

Topps Co. .. .. .. .. .. .. 19.50 .. .. .. .. 19-12

Consistent earnings

and dividend growth

Abbott Labs .. .. .. .. .. 65.875 .. .. .. .. 70-39

Pfizer Inc. .. .. .. .. .. 84.625 .. .. .. .. 86-37

Wal-Mart Stores. .. .. .. ..56.625 .. .. .. .. 60-28

Aggressive growth

Alza Corp. .. .. .. .. .. .. 53.25 .. .. .. .. 50-23

Caere Corp. .. .. .. .. .. ..17.75 .. .. .. .. 24-12

Microsoft Corp. .. .. .. .. 125.25 .. .. .. .. 112-49

Octel Comm. .. .. .. .. .. ..24.50 .. .. .. .. 29-10

Staples Inc. .. .. .. .. .. 31.75 .. .. .. .. .31-9

Synergen Inc. .. .. .. .. .. 69.75 .. .. .. .. 71-10

Moderate income

and capital appreciation

None

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