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By Harry Milling | 04-13-2010 11:36 AM

Brighter Future for Power Producers

Despite very low electric power prices today, independent power producers will see better days, says David Wallack of Analyst Pick T. Rowe Price Mid-Cap Value.

Harry Milling: I'm Harry Milling, mutual fund analyst with Morningstar. I'm here with Heather McPherson, associate portfolio manager with T. Rowe Price Mid-Cap Value and David Wallack, the lead manager of that fund. Welcome to both of you.

2008, bad year, 2009 huge rally. Now we're in 2010. I gather you're not seeing the same compelling values, or at least the number of compelling values that you saw in 2009. But there must be value nevertheless somewhere. So, where is it?

David Wallack: Well, you're right. The average mid-cap stock is up over 100% since the market bottomed. A year ago or more, we were finding a lot of opportunities throughout the market and a broad variety of industries. Today, we have to be a little bit more selective, dig a little bit deeper. The market is always offering us opportunities among mid-cap stocks.

We're finding things to buy among the independent power producers, grocers, energy, and one or two industry groups as well.

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