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Jazzy Picks From The Common Fund's Motley Crew


Inside Wall Street

JAZZY PICKS FROM THE COMMON FUND'S MOTLEY CREW

As the man in charge of shepherding nearly $15 billion for some 1,200 schools, colleges, and universities, David Storrs, president of the Common Fund, hasn't been shy about hiring an eclectic group of money managers with vastly diverse styles. They include the aggressive Tiger Management, value investor Nicholas-Applegate Capital Management, and Rowe Price-Fleming International.

Common Fund's Equity Fund last year gained 10.5% vs. 7.7% for the Standard & Poor's 500-stock index. So far this year, the fund has only matched the S&P's 2% rise, but Storrs thinks that it will again beat the averages. "Our managers have excelled in coming up with big winners among the most unusual companies," he says.

Take Callaway Golf, maker of upscale golf clubs, including the popular Big Bertha line. Callaway's stock rocketed from 20 a share to 32 in just one hour after its initial public offering on Feb. 28, 1992. It has continued to climb to a pre-split 54, or 27, adjusted for a recent two-for-one split.

Money manager Catherine Avery at Nicholas-Applegate thinks the stock's rise is far from over. "We like companies with strong top- and bottom-line growth, and Callaway has been exceeding expectations," she says. Avery sees a net of $1.38 in 1993 and $1.65 in 1994.

COUNTRY MUSIC. Another standout is Gaylord Entertainment, a company that owns Opryland, the convention/resort complex in Nashville, as well as radio and cable television networks, such as TNN and Nashville Network.

"Gaylord has the franchise on country music," says Storrs. Through its networks, Gaylord has been beaming country music to Europe, the Far East, and Africa. "This will be a very profitable new business for Gaylord," says Storrs. He thinks the stock, which has climbed to 39 from 29 in September, will continue to rise as a result.

Storrs regards Cable & Wireless as a good "China card." It owns 58% of Hong Kong Telecommunications, a key player in China's telephone market. "The frequency of calls between China and Hong Kong has been growing rapidly," notes James Seddon at Rowe-Price Fleming in London. Hong Kong Telecom has exclusive rights to provide services in Hong Kong, and it accounts for 50% of C&W's earnings. But Seddon is also upbeat about C&W's British unit, Mercury Communications, the only company other than British Telecommunications licensed to provide national and worldwide telephone services in Britain.

Now at 32, C&W's American Depository Receipts could hit 45 in a year, based on estimated net of $1.75 in fiscal 1993 and $2.25 in 1994, says Seddon. C&W earned $1.57 in the year ended Mar. 31, 1992.GENE G. MARCIAL


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