Newswise — Dozens of colleges and universities now have investment portfolios managed by students as part of their finance education. Even in a bear market, fund managers have to buy something. Here are thoughts on a few "bear market busters" from student investors. At the Neeley School of Business at Texas Christian University in Fort Worth, student investors managing the Educational Investment Fund have been buying Thermo Fisher Scientific which sells everything from high-end lab equipment to commonplace petri dishes and microscope slides.
"This has been the fund's top performer thus far in 2009 and we believe it can continue to be a key contributor for quite some time, says TCU student Jason Hartman, manager of the TCU Student Investment Fund. "The vast majority of Thermo Fisher Scientific's customers come from academia, government and the healthcare industry, all areas generally regarded as being recession resistant."
TCU student investors are also bullish on Rockwell Collins.
"Bulletproof management," comments Hartman. "A temporary down period for aerospace presented a good entry point, and the company's low leverage compared to industry comps was ideal in a credit-strapped environment. At the time of our purchase our analyst's valuation models showed the stock to be substantially undervalued."
The TCU students also see Occidental Petroleum as a bear market buster citing strong fundamentals, a capable and disciplined management team, moderate political risk and good growth prospects. They like Oxy's business model.
"They primarily invest in older more developed oil and gas fields which we believe is inherently less risky, from a business perspective, than investing in newer more exotic energy plays," notes Hartman.
At Roanoke College in Salem, Virginia, the student-managed investment fund likes Freeport-McMoran Copper and Gold, Inc.
"They've outperformed the market by more than 60 percent in the last three months," says Roanoke College student Andrew Streaman, president of the fund. "They have the largest molybdenum mine in the world and that mineral is a hardening agent for steel. We believe that once the housing market rebounds, this company will do remarkable things."
Consumer staples and utilities also are on the "buy list" for students managing the Roanoke College fund.
"We invest in them because they tend to be more conservative," says Streaman. "No matter how bad the recession is, parents are always going to buy diapers for their babies."
The student-run investment funds at colleges and universities have various goals. TCU's fund, started in 1973, stakes a claim to being the oldest entirely student-run fund, and delivers a percentage of its net asset value to TCU's general fund and Baylor College of Medicine's Department of Ophthalmology.
At Roanoke College, the students manage a small percentage of the college's endowment fund.
RSS