Will Chester's Mid-Cap Picks -- Barron's

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Driving Down the Middle by Catherine Shu

Highlighted companies: Constellation Brands Inc. (STZ), Continental Airlines Corp. (CAL), AMR Corp. (AMR), Electronic Arts Inc. (ERTS), GameStop Corp. (GME), DaVita Inc. (DVA), Genesis Healthcare Corp. (GHCI), Laboratory Corp. of America Holdings (LH)
Summary: Interview of Will Chester, Chief Portfolio Manager of the Westcore Select Fund. Chester follows and invests in mid-cap stocks, because they're "more established less volatile than their smaller-cap brethren." Stocks he likes: (1) Constellation Brands Inc. (STZ) -- breadth-of-product has helped it capture market in both the restaurant and non-restaurant business. He expects its wine business to accelerate, and likes its beer business too. (2) Continental Airlines Corp. (CAL) and AMR Corp. (AMR) -- has been buying them for the past nine months, in anticipation of substantial industry improvement on the tails of renegotiated labor contracts. (3) Electronic Arts Inc. (ERTS) and GameStop Corp. (GME) -- he has a 9% exposure to video games. Console launches speak of "pent-up demand." (4) Healthcare: DaVita Inc. (DVA), Genesis Healthcare Corp. (GHCI), Laboratory Corp. of America Holdings (LH) -- their common denominator is that they stand to gain from government policy, DaVita through its dialysis which should soon come under serious Medicare, and Genesis should benefit from federal and state programs that offer incentives to companies trying to improve location of care. Stocks he's selling: T. Rowe Price Group Inc. (TROW) -- he likes the company, but feels the current run-up gives it limited further potential.
Related: Stocks With Momentum: Constellation Brands • You Don't Have to be Crazy to Buy Airlines • Electronic Arts: Let the Games Begin! • Electronic Arts' Earnings Exceeds Expectations • GameStop Jumps On Strong Earnings Report • Knee-Jerk Drop in Healthcare May Be Buying Opportunity