Every January, Forbes asks a dozen of America's top stock-pickers to name their favorite equity. Last year the selections of the top six rose a staggering 83 percent on average. These six were invited back by Forbes to have another go at it for 1992. One, Stephen Timbers of Kemper Financial Services, declined, preferring to rest on his laurels. The other five took up the challenge. Here they are, along with their 1991 gains and their single favorite stock for 1992:
Van Brady, Presidio Management (165 percent, EMC)Byron Sanders, The Speculator (133 percent, Laser Sight)
John Granahan, Granahan Investment Management (75 percent, Confer Tech International)
John Tauer, Piper Jaffray & Hopwood (36 percent, Philip Morris)
Mariola Haggar, Kemper Securities (32 percent, Biomet)
Both of the foreign stocks recommended in last year's "pick one" derby outperformed the average overseas equity. The leader was BSN, a French food manufacturer selected by Nicholas Reitenbach of Pinnacle Associates. It gained 14 percent. This time around, Reitenbach likes Hong Kong & China Gas, which recently sold for only 15 times his estimates for 1991 earnings.
Joseph Velli of Bank of New York, the newcomer in the international division of Forbes' annual sweepstakes, is bullish on Medeva, a British drugmaker. The company makes some generic drugs and buys the patents of drugs developed by other firms.
Last year's bull market wasn't particularly kind to Forbes' five short-sellers. Their least-favorite stocks actually rose an average 30 percent. Benjamin Kopin of Lynx Partners, whose pick to plunge, Wells Fargo Bank, rose a modest 7 percent, was the sole bear invited back for Forbes' 1992 contest. This time Kopin recommended selling Sequent Computer Systems, which makes parallel-processor computers for transaction processing. He calls it "a high-cost producer getting squeezed from both ends of the market."
Robert Doviak, of Doviak Partners, one of four new entrants in the short-selling sector, would dump College Bound, despite its astounding 11,200 percent appreciation over the past two years. The company offers test-preparation classes to high school and college students. Doviak pronounces himself uncomfortable with its reported numbers.
Jonathan Epstein of Lehman Bros. has his own doubts about one key number of Staples, the office supply chain: its stock price. He thinks it shouldn't be selling for 200 times its latest annual earnings in the face of all the imitators the company has inspired.
David Hines of Hines Management has nothing but bad things to say about Egghead, the retailer of PC software. "It's like a mom-and-pop dimestore. With the Wal-Marts of the computer industry coming in, it just will not be able to compete."
Eric Kuby of Rodman Advisory Services is Forbes' final bear, and in one way its bravest. He is taking a contrarian's negative stand on Home Depot, one of Wall Street's favorite growth issues. "People have gotten carried away with its prospects. Its current market price is over $60 million per store. That just seems unreasonable."