 January
3, 2005
MoneyWise
2005: A Look Ahead
by Amy Baldwin
Read
the article online.
Searching
for the most lucrative places to stash your cash in 2005?
Of course you are.
Even in this do-it-yourself age of online stock trading and, heck, home
remodeling, we figure a little free advice from the pros couldn't hurt.
That's why MoneyWise turned to some area experts for guidance.
Among others...
Industrial stocks
Bill Baynard and Don Olmstead of Novare Capital Management favor industrial
stocks, believing the weak dollar will continue to help manufacturing
companies better compete overseas. (As the dollar falls, U.S. manufacturers
benefit because their products become cheaper for foreigners to buy.)
One company the Charlotte asset managers have added to clients' portfolios
recently is Briggs & Stratton Corp. (BGG: NYSE), a leading maker of
small gas-operated engines used mainly in lawn mowers and tillers. About
30 percent of the company's revenues come from overseas, according to
Novare's research. "This well-run company generates significant free
cash flow and is attractively priced," Baynard said.
Oil, gas pipeline stocks
No sector better performed than energy in 2004, due to high oil and
gas prices. The Standard & Poor's energy sector ended the year up 28
percent, well ahead of runner-up utilities, which gained 20 percent.
But Baynard and Olmstead don't think such gains can be maintained and
they recommend investors "take some chips off the table" in 2005. Still,
going forward the two are bullish on oil and gas pipeline stocks. Pipeline
companies transport, store and process oil and natural gas. Because
they are paid a fee for their services rather than for selling oil or
gas, they are insulated from the fluctuations in the prices of those
commodities. The companies also have attractive shareholder distributions
with yields averaging between 6 percent and 8 percent, according to
Novare. They recommended two pipeline companies: Kinder Morgan Energy
Partners L.P. (KMP: NYSE) and Northern Borders Partners L.P. (NBP: NYSE),
which have respective yields of 6.3 percent and 6.8 percent.
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