NEW YORK (CNN/Money) -
While some may regard the controversies swirling around several blue-chip companies as a harbinger of bad news, two stock strategists appeared on CNNfn saying that these situations create buying opportunities in some industry leaders.
Thomas White, chief investment officer of Thomas White International, suggests a position in Citigroup despite the continuing e-mail saga between Jack Grubman, the former telecom analyst at its Salomon Smith Barney unit, and the company's CEO Sanford Weil.
"The only way you can buy a quality company at a discount is to have an interim problem," he said. "Now this company has some short-term problems, but you have to ask yourself, three years from now, will you even remember these problems? Citigroup will be something of a fair price then and you'll have a good rate of return."
| Thomas White's picks
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Thomas also says litigation worries at the world's largest cigarette maker, Philip Morris, has created a buying opportunity.
"Philip Morris sells mainly at a discount because of the unattractiveness of the concept of tobacco that many people have, but it's a legal product. A lot of the money they get in for the tobacco eventually goes back out to pay for the illnesses they've caused. As long as this country allows them to be sold, then you have good rates of return. This is a company that has over a 6 percent rate of return, buys back about 5 percent of its stock a year and has huge cash flow," he added. "Its stake in Kraft is well worth the stock's value itself -- putting the tobacco company literally hardly at any price at all."
White and the funds under his management own stakes in the companies mentioned.
Citigroup (C: up $0.76 to $36.90, Research, Estimates) shares are in a 52-week range of $52.50 to $24.48.
Philip Morris (MO: down $0.53 to $38.06, Research, Estimates) shares have been between $57.79 and $35.40 in the past year.
Stephen Leeb, president of Leeb Capital Management, recommends another large-cap stock with some controversy around it, AOL Time Warner, the parent company of CNN/Money.
"It's one of the best positioned blue-chip stocks around right now. I think they're running on all cylinders and they do have a chance to make broadband work in a major way," he said. "And if that's the case, they could dominate media almost across the board."
| Stephen Leeb's picks
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Leeb says his second selection, Apex Silver Mines, is a speculation play. "They have a mine in Bolivia which is likely going to have at least a billion ounces of silver, and if you want to give a young person a gift that could really make an impact, this would be it," he added. "It's not for widows and orphans, but someone, you know, you want to make a lot of money for."
Tiffany is Leeb's final pick. "Yesterday they came out with excellent earnings on the strength of gold and silver jewelry sales within their stores. And I think that's going to continue."
Funds under Leeb's management own stakes in the companies mentioned, however Leeb does not have a personal stake.
Shares of Apex Silver Mines (SIL: up $0.35 to $14.15, Research, Estimates) have been between $18.12 and $8.52 in the past year.
AOL Time Warner (AOL: up $0.12 to $15.42, Research, Estimates) shares are in a 52-week range of $37.94 to $8.70.
Shares of Tiffany (TIF: up $0.79 to $28.78, Research, Estimates) have been between $41.00 and $19.40 in the past year.
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