Derek Batts, president of Detroit-based Union Heritage Capital Management, revels in finding equities that sell at a discount but possess the potential to outperform the market. "We're buying everything we told you about last year," says the confident Detroit University alumnus, who manages $200 million for such clients as the city of Detroit Police and Firemen Retirement Account, and the State of Ohio Bureau of Workers' Compensation.
Due to the precipitous fall of the market since last year, Batts' Private Screening picks did poorly, losing 37.1%, mostly due to the troubles of former tech titan Cisco Systems. Batts insists his choices continue to be "undervalued and favorably priced."
The first of his picks, New York-based Bristol-Myers Squibb Co. (NYSE: BMY) wound up losing 6.72% for investors. It relies on staples, such as headache medicine Excedrin and the Clairol hair-enhancement product line, to turn a profit. It's also succeeding in the pharmaceutical arena, battling cancer, cholesterol, and heart disease. Batts still recommends this play to his clients. The stock was selling at $55.56, and could hit $65 by next Christmas.
Cisco Systems Inc. (NASDAQ: CSCO) was part of the "tech wreck" of 2000-2001. This San Jose, California-based firm, which once sold for $75, was selling for $12.18 a share in September. According to Batts, it's a "hold" for his long-term...