Tim Hartch
Tim Hartch
BBH Core Select

Pick: Novartis (NVS)

Slow and focused could be Tim Hartch's mantra. The fund he co-manages, BBH Core Select (BBTEX), typically holds only 20 to 30 stocks and hangs on to them for an average of three to five years. That approach has fueled 6.8% annualized returns since Hartch began in 2005 (vs. 3.1% for the S&P). Hartch combs the world for stout giants whose shares have slipped to 75% or less of what Hartch thinks they're worth. Then he pounces. Today he sees opportunity in Novartis, a top holding of his fund. The shares have been mostly treading water for years; more recently, fears of government cutbacks in reimbursements have bumped the stock 20% off its 52-week high. But with pharma offerings that treat chronic diseases, Novartis faces less risk of reimbursement declines than competitors, Hartch thinks. It also has a highly regarded pipeline of potential blockbuster drugs, and its eye-care business, Alcon, is booming. At a current $52, the shares are underpriced, in Hartch's view -- he thinks their real value is $75.

--R.D.


By Katie Benner, Ryan Derousseau, Amy Feldman, and Mina Kimes @FortuneMagazine - Last updated June 20 2012: 10:46 AM ET
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