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Markets & Stocks
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Stock picks by the pros
Money managers pick up stocks in the video game, insurance and pharmaceutical sectors.
November 7, 2003: 2:32 PM EST

NEW YORK (CNN/Money) - With signs that a U.S. economic recovery is finally underway, two money managers appeared on CNNfn to suggest some stocks they believe will post gains in the coming weeks.

Ted Parrish, co-portfolio manager with the Henssler Equity Fund, says Affiliated Computer Services is still a reasonably valued tech stock.

"They provide a business process outsourcing for governments on the state, local and federal level. Things like toll road booths, collection of the tolls, welfare payments and also just a number of different things that the government has to do that are redundant tasks," he said. "It's expected to grow at about 19 percent a year and it sells at a P/E ratio of about 19. It's a cheap tech stock that's growing really fast."

Ted Parrish's picks
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Pfizer (PFE)
American International Group (AIG)
Affiliated Computer Services (ACS)

Parrish's second selection is Pfizer.

"I like the company because it's trading near a five-year P/E low and it's expected to grow at about 13 percent a year, grow its earnings that is," he noted. "And it's a great name, has a huge R&D force and has about $13 billion in cash. So I think they're ready to grow going forward."

American International Group rounds out Parrish's picks.

"I mean, they have the lowest balance sheet risks out of any of the property and casualty insurers and I think the company's trading at a really low multiple right now," he added. "It's a company that typically trades at a premium to the S&P and now it trades at a discount. It's trading about 15 times earnings and it's picked to grow at about 13 percent."

Funds under Parrish's management own stakes in the companies mentioned.

Shares of Affiliated Computer Services (ACS: down $0.55 to $49.57, Research, Estimates) have been between $38.40 and $56.56 in the last year.

Pfizer (PFE: down $0.06 to $31.80, Research, Estimates) shares are in a 52-week range of $27.90 to $36.92.

AIG (AIG: down $1.60 to $58.27, Research, Estimates) shares have been between $42.92 and $68.25 in the last year.


Ryan Jacob, chairman of Jacob Asset Management, sees further gains for video game company Take-Two Interactive.

"This is a holding of ours and they should be able to take advantage of the increased networkability of the games. Right now a lot of these interactive services are free, but they're charging for online tournaments," he noted. "We think over the next few years this will be a significant source of recurring revenue for the game publishers and we don't think that's in the stock now."

Jacob's other selection is Apple Computer.

Ryan Jacob's picks
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Apple Computer (AAPL)
Take-Two Interactive (TTWO)

"We got involved in Apple when they launched their iTunes service. We felt that finally getting the record industry to come to terms with reasonable licensing for people to buy music online was a watershed event. And we look at Apple as basically a way to participate in that," he added.

"We think that a combination of the crackdown that RIAA has had on illegal file sharing, combined with the ease of use for the consumer buying a la cart music, is really a powerful combination and we look forward to the next three or four months. We think the metrics will be very positive and Apple is a way for us to play on that."

Funds under Jacob's management own stakes in the companies mentioned.

Shares of Take-Two Interactive (TTWO: up $0.05 to $40.10, Research, Estimates) have been between $18.30 and $41.67 in the last year.

Apple Computer (AAPL: down $0.31 to $22.81, Research, Estimates) shares are in a 52-week range of $12.72 to $25.01.  Top of page




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