INTERVIEW: Growth Stocks: Their Time Has Come Again by Sandra Ward
Summary: Barron's interviews Joseph McNay of Essex Investment Management, the "godfather of growth-stock investing." His current strategy is organic -- industries and companies that should grow regardless of economic conditions. Sectors and stocks he likes:
- Energy: (1) Schlumberger Ltd. (SLB) and Core Laboratories N.V. (CLB) -- leading large- and small-cap oil service companies. SLB is global, and CLB's exclusive injection system helps drillers get more oil from existing wells. (2) MEMC Electronic Materials Inc. (WFR) -- it makes polysilicon for solar wafers. It should make $5-7/share within a couple years, up from $1.66. (3) Solar companies SunPower Corp. (SPWR) [it's growing 150%-200% a quarter], Suntech Power Holdings Co. Ltd. (STP), First Solar Inc. (FSLR), Canadian Solar Inc. (CSIQ), Trina Solar Ltd. (TSL), though "some of those" may be at levels that warrant a pull back.
- Nanotechnology: (1) FEI Company (FEIC) -- it has 70% of the business, yet it's unknown and unexploited. (2) Harris & Harris Group Inc. (TINY) -- a VC firm for nanotech, with a couple companies that could go public within 6-12 months.
- Biotech: (1) Gilead Sciences Inc. (GILD) -- #1 for HIV and hepatitis B. (2) Genentech Inc. (DNA) -- its cancer drug Avastin is a cheap ($2,000) alternative to $14,000 Lucentis for mascular eye degeneration. (3) Vertex Pharmaceuticals Inc. (VRTX) -- its hepatitis C drug seems to have a very good shot.
- Tech: (1) Focus Media Holding (FMCN) -- an audio-visual display maker for advertising in China, it has grown 200%+ in each of the past three quarters. (2) Synchronoss Technologies Inc. (SNCR) -- its VoIP software allows communication-services providers to manage customer orders. (3) Riverbed Technology Inc. (RVBD) -- its equipment speeds data performance in WANs, and it's growing 200-500% a quarter. (4) Google Inc. (GOOG) -- continues to dominate the market. (5) Baidu.com Inc. (BIDU) -- it has gone from 25% to 65% market share in China.