Kevin Rendino
Black Rock Basic Value Fund
How much does Kevin Rendino like IBM? "I'm obsessed," admits the fund manager, whose $4 billion BlackRock Basic Value Fund has returned 11.7% annually since its 1994 inception, beating the S&P by about 4% a year.
Analysts expect the tech giant to turn in annual earnings growth of 10% over the next five years, but its P/E is just 12. "It's my responsibility to get IBM to a higher multiple," Rendino jokes. He admires the company's transition from a hardware business to a higher-margin services provider, and he expects corporate clients to boost IT spending. He also thinks IBM will benefit from the adoption of Internetbased software, because it's a "transformational change" that will require IBM's infrastructure expertise.
He says of the stock (which has a 2.1% dividend yield): "I think it has almost no downside."
--M.K.
NEXT: Hewitt Associates
