Barron's Interview Praveen Gottipalli
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Date updated:08-23-2008

Talking with Praveen Gottipalli, Director of Equity Investments, Symphony Asset Management. Symphony Asset Management's approach doesn't produce home-run kinds of returns. But it can offer stable gains in tricky markets.

symbol name last price % change open
  • +
  • WLT
    Walter Energy
  • $33.76
  • 0.00%
  • $34.70

Among the top holdings: Walter Industries (WLT), which showed up in one of the screens about two years ago as a homebuilder with a valuation cheaper than its peers, even though its main source of revenue was metallurgical, or coking, coal, a high-quality, low ash-content variety needed by steel producers. The shares have more than quadrupled in the past year, along with the price for metallurgical coal. While the stock trades in the mid-90s, Gottipalli expects it to rise further, with full-year '09 earnings projected to be $15 a share, aided in part by an increase in capacity and advance orders. Meantime, he hedges the risk by investing in thermal-coal producers, and balances his long positions with shorts.

People owning WLT also tend to own: AAVABXAADGAMATAQRBGRBXL

TheStreet.com Rating: C What is this?

  • +
  • FCX
    Freeport-mcmoran
  • $56.88
  • 0.00%
  • $57.70

Gottipalli's also impressed with Freeport McMoRan Copper & Gold (FCX), which is benefiting from China's unprecedented rise. Freeport, which purchased rival Phelps Dodge, is the world's largest nongovernment copper producer, a very attractive position as Asia constructs more homes; an average home needs 400 pounds of the metal, he says. Copper prices have quadrupled in recent years and Freeport shares have been on a tear, too -- retracing a bit when commodities fell this summer.

People owning FCX also tend to own: ACIAINVANRAPCBBDBTUCHK

TheStreet.com Rating: D What is this?

  • +
  • AAPL
    Apple Inc.
  • $139.49
  • +0.10%
  • $138.99

Symphony's researchers like the fact that it has $20 billion in cash and no debt, accounting for $22 of its share price. And cash could double by 2010, he says. The stock, at a recent price of 174, trades at 28.6 times next year's estimated earnings. Apple's core business is still computers, and Gottipalli sees room for major growth.

People owning AAPL also tend to own: AMDCSCODELLGOOGIBMINTCMSFT

TheStreet.com Rating: B- What is this?

  • +
  • MOS
    Mosaic Co (the)
  • $55.97
  • 0.00%
  • $56.57

Other favorites: leading companies that make fertilizer from phosphates or potassium. Farmers are using more fertilizer to increase yield on crops for animal feed, produce or biofuels. He likes The Mosiac Company (MOS), whose shares have roughly tripled in the past year, and Intrepid Potash (IPI), whose shares are up about 46.2% from their spring initial-public-offering price of $32.

People owning MOS also tend to own: CCATDEFNMFREGEKO

TheStreet.com Rating: B- What is this?

  • +
  • IPI
    Intrepid Potash I
  • $32.64
  • 0.00%
  • $33.67

Other favorites: leading companies that make fertilizer from phosphates or potassium. Farmers are using more fertilizer to increase yield on crops for animal feed, produce or biofuels. He likes The Mosiac Company (MOS), whose shares have roughly tripled in the past year, and Intrepid Potash (IPI), whose shares are up about 46.2% from their spring initial-public-offering price of $32.

People owning IPI also tend to own: AAPLAFLAIGAWKCLHBCOPDAI

TheStreet.com Rating: C- What is this?

  • +
  • CHK
    Chesapeake Energy
  • $24.09
  • 0.00%
  • $24.28

Gottipalli holds shares in independent oil companies with U.S. reserves that use new horizontal-drilling methods to extract oil and natural gas in once-inaccessible places. That way, there's no sovereign risk. Gottipalli hedges commodity risk by using exchange-traded funds to guard against further oil-price declines. Both Chesapeake Energy (CHK) and Devon Energy (DVN) appear on Symphony's 13F filing for the second quarter.

People owning CHK also tend to own: ACIAINVANRAPCBBDBTUCMCSK

TheStreet.com Rating: D+ What is this?

  • +
  • DVN
    Devon Energy Corp
  • $66.13
  • 0.00%
  • $66.15

Gottipalli holds shares in independent oil companies with U.S. reserves that use new horizontal-drilling methods to extract oil and natural gas in once-inaccessible places. That way, there's no sovereign risk. Gottipalli hedges commodity risk by using exchange-traded funds to guard against further oil-price declines. Both Chesapeake Energy (CHK) and Devon Energy (DVN) appear on Symphony's 13F filing for the second quarter.

People owning DVN also tend to own: ACIAINVANRAPCBBDBTUCHK

TheStreet.com Rating: D+ What is this?

  • +
  • V
    Visa Inc.
  • $66.81
  • 0.00%
  • $66.40

Visa (V) and MasterCard (MA) are among Symphony's holdings, according to filings. These companies make money by providing the cards to banks -- which bear the credit risk -- and reap the processing fees.

People owning V also tend to own: DDDHRESLNLYPOTWWEF

TheStreet.com Rating: C- What is this?

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Start Price

Return Value

Start Date

WLT 82.07 -58.86% Sep 4th
FCX 80.36 -29.22% Sep 4th
AAPL 166.96 -16.45% Sep 4th
MOS 93.09 -39.88% Sep 4th
IPI 40.28 -18.97% Sep 4th
CHK 45.16 -46.66% Sep 4th
DVN 95.42 -30.70% Sep 4th
V 73.05 -8.54% Sep 4th
MA 229.63 -26.67% Sep 4th

Average return:

-30.66%

Success rate:

0%

Tracking Started: 09-04-2008

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