Any TakersGrowth Vs. Value
Some fund managers say the market selloff means that growth vs. value may no longer be a useful distinction. "I find that what may have been growth stocks have become more value-oriented," said Steve Jones, senior analyst at Value Line, noting that Red Hat (RHAT:Nasdaq) , the Linux provider, and Nortel (NT:NYSE) have both fallen sharply from their highs, making them potential value plays.
"I think there are a lot of opportunities in the market and that most stocks are undervalued," said Barbara Marcin, portfolio manager at Gabelli Asset Management. "I don't think making a case for this versus that makes sense right now. You just need to find the good ones." Marcin, who runs a large-cap fund, likes American Home Products (AHP:NYSE) , Cendent (CD:NYSE) , Sprint (PCS:NYSE) , Nextel (NXTL:Nasdaq) and Disney (DIS:NYSE) .
Many growth-oriented names in the pharmaceutical and tech arenas are trading like value plays as a result of the "extremely volatile market," said Tim Quinlisk, senior vice president and team leader of value funds for John Hancock. Quinlisk "absolutely loves" Citigroup (C:NYSE) and also media giant Viacom. Texas Instruments (TXN:NYSE) also went on his list after it dipped below $21. "On a relative basis, there are more opportunities in the large-caps at this moment," Quinlisk said, "because of the fact that the blue-chip franchise has gone on sale. I think first and foremost people should be buying those."
Vogelzang prefers TranSwitch (TXCC:Nasdaq) , a smaller chip company that's trading at $3.80, off from its 52-week high of $74.69. The company has about $5 in cash per share and no debt. "If they can minimize future losses and not burn cash, you're buying five dollars in cash for four dollars," said Vogelzang. "Who cares what earnings are? You're buying cash. And at some point in time earnings will turn around."