stocks

Five-Star Manager: Buy Battered Stocks

Andrew Fisher

T. Rowe Price's David Giroux says the recent market volatility has punished some promising stocks unfairly.

Giroux's five-star Capital Appreciation Fund has earned an average of 13 percent per year over the last five years.

"We see tremendous value, and not a lot of downside," he told CNBC.  "I can't tell you if [they're] going to turn today, or tomorrow, or six months from today, but I think there's a lot of value for an investor who has a longer-term time horizon."

He likes Danaher, which he describes as a "relatively low-cyclical industrial...a great business, great company, great management, growing its earnings pretty consistently at a 15 percent annual pace."

Another pick is White Mountains Insurance.

"It...trades about 1.1 times book value, no subprime, no RMBS, no leveraged loans, just a very high-quality insurance company," he said.

Giroux also sees some opportunities in the badly-beaten financial sector.

Tyco Electronics, a spin-off from Tyco, tops his tech list.

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Unfairly Slammed Stocks

"They've been beating numbers the last two quarters, taking up guidance, they're buying back about 10 percent of their company this year," he said.

A much bigger company that's also buying back its stock is Dell.

"Even if the environment's a little bit more difficult in '08 than it was in '07, they're going into a lot more retail locations, which should be a buffer for their sales growth in '08," he said.