Inside Wall Street
ON THE LOOKOUT FOR SNAPPY GAINS
One of the more aggressive mutual-fund managers around, Audrey Snell doesn't shy away from volatile stocks or those with high price-earnings ratios. Described by peers as a "momentum" player, Snell is currently buying technology, telecommunications, and health-care issues she feels have prospects for big earnings increases.
Snell's hard-driving style has paid off handsomely since she took the helm of the $100 million SunAmerica Small Company Growth Fund three years ago. In 1991-94, the fund posted hefty compounded returns of 12.7% a year--vs. 6.2% for the Standard & Poor's 500-stock index.
Snell's picks aren't necessarily the underdogs. Alliance Semiconductor (ALSC), for one, has been on the upswing, climbing from 13 a share last autumn to 413/4 on Mar. 14. Yet Snell is convinced its full potential lies ahead.
"Demand for Alliance's chips has been massive because of ever-increasing need for speedier performance by microprocessors," says Snell. Alliance should earn 90 cents a share in 1995 and $1.50 next year, she figures.
Another Snell favorite--Coram Healthcare (CRH)--is one of the hot stocks in the industry. Coram, which is on an acquisition binge, provides out-of-hospital services for patients suffering from chronic ailments. Snell thinks the shares, which have shot up from 10 last July to 24 lately, are headed for the high 30s. She believes Coram will earn $1 to $1.20 a share this year, and $1.50 in 1996.
Lannet Data Communications (LANTF), an Israeli maker of computer equipment for local-area networks and mainframes, is another strong performer on Snell's list. It climbed from 8 last October to 19 on Mar. 14. The company, "which makes among the best switching equipment in the industry," according to Snell, is in talks with several U.S. companies to establish a bigger presence in America. Lannet's products, distributed in 50 countries, are in hot demand not only for computers but also for the automotive, pharmaceutical, telecommunications, and chemical markets. Earnings are heading up, notes Snell, jumping from 39 cents a share in 1994 to an estimated $1 this year, and $1.35 in 1996.
Tellabs (TLAB), a maker of voice- and data-networking products for telecommunications, trades at a hefty p-e of 34, but Snell thinks the stock is still cheap. She expects Tellabs to make $2.25 a share this year and $3 next year, up from last year's $1.60. Now at 53, the stock is headed for 70, Snell believes.BY GENE G. MARCIAL