5-Star Manager's Bear Picks
Speciality insurance, global enterprise software, and dry bulk shipping offer some promising opportunities for investors, according to Jonathan Vyorst, senior vice president and portfolio manager of the five-star Paradigm Value Fund.
The fund is up an average of 17.78 percent per year over the last five years.
"We are in a bear market, so you have to invest cautiously, and be prepared for more downturns," Vyorst warned. "These are great picks over a long period, though."
Recommendations:
Vyorst's first pick is American Financial Group.
"It's a great business," he said. "They have specialty markets that are less competitive, and it's as cheap as any stock that you'd want to have."
He also likes software producer Sybase.
"Sybase sells for 12 times free cash flow; it's a cash cow; they just did a Dutch tender offer, bought back ten percent of their shares," he explained. "Whether the market's good or bad, these guys are going to be generating a certain amount of annuity-like cash flow each year."
Also on his list is Horizon Lines, an American shipping company.
"The key to Horizon Lines is that it's a 'Jones Act shipper.'" he said. "The Jones Act limits certain lanes in the United States to American companies...so it's an oligopoly."
Vyorst warns that Horizon is being investigated by the Department of Justice for alleged price-fixing.
