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Commentary

Research Highlights: Hunting for Sound Investments

There are two smart, contrarian ways to invest in the stock market right now. You could invest in some great companies whose stocks are trading at a fraction of their historical levels. (There are plenty of these out there.) Or, put your money with savvy fund managers to do it for you. This week Pat Dorsey and Russ Kinnel--who head up our stock and fund analysts, respectively--published their ideas on how to pursue these two strategies.

Good Funds for Hard Times, by Russ Kinnel, director of fund analysis

Now Is the Time to Buy Great Companies, by Pat Dorsey, director of stock analysis

For more investment ideas, we also published Our Favorite Telecom Stocks by Michael Hodel and Our Favorite Specialty Health Funds by Peter Di Teresa. And to hear what fund managers think of the markets, check out the Q&A Nick Gerber had with Morningstar.com users, as well as our weekly column on what fund managers are buying. This week’s theme: travel and energy stocks that are looking attractive.

We’ve also published upwards of 100 stock and fund Analyst Reports this week. Below you’ll find some of those we were most positive or negative on.

Positive Stock Analyst Reports

 Capital One (COF), by Craig Woker
"Capital One is an incredible bargain."

 Intel (INTC), by Jeremy Lopez
"After a long stretch of panning Intel, we've had a change of heart."

 Berkshire Hathaway BRK.B, by Travis Pascavis
"Berkshire Hathaway's share of the losses resulting from the recent terrorist attacks could reach upward of $2.2 billion, according to company estimates. That sounds like a bundle, but not for a firm of Berkshire's size."

 P&O Princess Cruises (POC), by T.K. MacKay
"The average cruise stock price dropped a staggering 37% on September 17 when the markets reopened, but we think this presents opportunities for long-term investors."

 Boeing (BA), by Jonathan Schrader
"We believe that pessimism surrounding Boeing's long-term prospects has gone too far, because the company is no longer a one-trick pony."

Negative Stock Analyst Reports

 Microsoft (MSFT), by Joseph Beaulieu
"The net effect of our new assumptions is minuscule growth in the second half of 2001 and in 2002, with growth returning to the low teens in 2003."

Despite their big drop, airline stocks are no bargains. That’s according to our airline analyst Jonathan Schrader, who’s negative on each of these stocks:

 AMR (AMR)

 Delta Air Lines (DAL)

 Southwest Airlines (LUV)

 UAL (UAL)

Positive Fund Analyst Reports

 Hartford Stock (IHSTX), by Brian Portnoy
"The fund has finished each calendar year in its category's top third while at the same time earning below-average risk scores."

 Fidelity Growth Company (FDGRX), by Scott Cooley
"This fund is pretty big, but unlike a lot of the industry's behemoths, it's no index hugger."

 First Eagle SoGen Global (SGENX), by Gregg Wolper
"A fund constructed like this one should hold up in decent shape when overpriced stock markets crash back to reality."

Next Week on Morningstar.com

  • Starting Saturday, September 29, and lasting one week, we'll highlight 10 new star ratings. Each week we highlight a different list. If you're not a Premium Member, you can still see these 10 star ratings. (To view each week's free star ratings, you do need to register, but that's easy--and free.)
  • Video Reports three times a day. Check out our weekly schedule for what’s on tap.
  • Pat Dorsey, our director of stock analysis, on Fox News Channel. Pat makes his weekly appearance on the Bulls & Bears show on Saturdays at 10:00 a.m. EST. (The show also runs at 6:30 p.m. Saturday and 9:00 a.m. Sunday.)
  • Russel Kinnel on CNBC. See our director of fund analysis each Friday morning at about 10:25 a.m. EST.
  • Christine Benz on CNNfn. See the editor of Morningstar FundInvestor talk funds every Friday at 4:45 p.m. EST.

If you read research you love or hate on the site, let me know at haywood.kelly@morningstar.com. Also note that you can keep up with Morningstar.com through two of our weekly e-newsletters: Weekly Wrap and SmartInvestor. They’re both free.