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Good Times for Smith Barney Appreciation

Fund gets big bounce from tech holdings.


This is Smith Barney Appreciation Fund's (SHAPX) kind of market. Manager Hersh Cohen loves to buy growth stocks with solid fundamentals when sentiment surrounding them turns negative and their prices fall. This was certainly the case with many tech shares after 2000's Nasdaq downturn, so Cohen went shopping. He snapped up shares of tech firms LSI Logic (LSI), ADC Telecom (ADC), and JDS Uniphase (JDSU), companies that he thought sported strong balance sheets but that the market hated. Many of those stocks have gotten a nice pop in the last month or so, and so has the fund; its 7.5% return for the month of April has helped it land in the large-blend category's top third for the year to date through May 10, 2001. Meanwhile, Cohen has since sold many of those tech holdings, which he thinks are too pricey these days. 

Other than tech, Cohen has added on the edges to more-traditional value areas. For example, he added a position in Chevron (CHV), because he thinks that oil stocks' valuations aren't reflecting the strong refinery profits that he foresees. He has also added a bit to the fund's insurance stake, because he likes insurers' balance sheets and their pricing power these days.

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Catherine Hickey does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.