Stock pickers see some opportunities
for 2005

IN DEBTH:
CAROLINAS INC.

by David Mildenberg
Staff Writer(read complete article on CBJ website)

Novare Capital Management
Six well-known N.C. companies are on the preferred list of about 90 stocks followed by Charlotte's Novare Capital Management.

The six are Bank of America; Family Dollar Stores Inc.; Jefferson-Pilot Corp.; Lab Corp. of America; Lowe's and Progress Energy Inc.

Of those six, the biggest disappointment this year is Family Dollar, which is down 24%. Partner Don Olmstead thinks rising oil prices trimmed spending by Family Dollar's low- and middle-income customer base, leading to a lower stock price.

But over the next few years Novare expects good performance from Family Dollar. "Once oil prices head back down, I think you'll see both sales and profits increase," he predicts.

Olmstead praises Laboratory Corp. of America, a Burlington-based firm that's the nation's second-largest clinical testing company. "We like the management because they don't sugarcoat things," he says. "They tell us what they are thinking." The testing industry is growing by 3% to 4% a year. At a price-earnings ratio of 16, LabCorp remains fairly priced despite rising 12% this year, Olmstead says.

His partner, Bill Baynard, favors Bank of America and Jefferson-Pilot because of strong management and solid dividends. "Jefferson-Pilot pays a dividend and is just a good, stable company that tends to operate below the radar screen," he says. As for BofA, Baynard thinks "it's running on all cylinders. To me, their capital markets business is a good complement to their mortgage business, which is a good complement to the general bank."