There's still lots of good news out there for the stock market, says Investment Research Institute (1259 Kemper Meadow Drive, Cincinnati, Ohio 45240). "Short interest continues at record levels, price/earnings ratios are still at their lowest levels in almost four years, Standard & Poor's 100 Index continues to hold above the all-important 500 mark, and the weak bond market and low-interest environment continue to keep U.S. stocks attractive as an asset class."
- Nationwide Growth Fund's dogged approach to value investing isn't flashy. But it has produced stellar 16.1 percent average annual returns over the past 15 years. Nationwide buys only stocks with low prices compared to their estimated earnings and other financial fundamentals. Then it holds patiently until either the stocks' fundamentals deteriorate or their prices rise too high. Recent favorites: Sprint, Archer-Daniels-Midland, AT&T, Hewlett-Packard, Merrill Lynch, Automatic Data Processing.- El Nino, the abnormally warm Pacific waters that produced last year's mild winter, won't be around this year or next, according to the National Oceanic and Atmospheric Administration. That's good news for energy companies, especially natural gas suppliers and electric utilities, whose stocks slumped with last year's mild weather, says Personal Finance newsletter (1101 King St., Suite 400, Alexandria, Va. 22314). PF's favorite cold-weather rebound plays for growth investors: Apache, Burlington Resources, Chevron, ENSCO International, Fluor, Schlumberger.
- Neuberger & Berman Socially Responsible fund looks for undervalued stocks that promote socially desirable goals. Four recent favorites: Banta, a major printer with a commitment to recycling; Cabot, the world's largest maker of carbon black and a company that is attentive to worker safety and the environment; Federal National Mortgage, which creates a secondary market for residential mortgages and one-third of whose board members are women or minorities; Johnson & Johnson, the medical products company, which excels in workplace environmental issues.
- One in nine nonsector stock funds still has 30 percent or more of its assets in the highly vulnerable technology sector, according to Morningstar Mutuals (225 W. Wacker Drive, Chicago, Ill. 60606). But some two dozen funds have beaten the general market over the past year while underweighting technology. Ranked by one-year performance, the best are: Yorktown Classic Value, USAA Growth, Yacktman, Clipper, Norwest Income Stock A and Dreyfus Appreciation.
- Municipal bond yields recently stood at the high end of their historic relationship with taxable Treasury bonds. That's because talk of a flat tax has suppressed muni demand. But munis deserve serious consideration at these levels, says T. Rowe Price Tax-Free High Yield's Stephen Wolfe. "Nobody seriously expects significant tax reform in the next two to three years.