Magazine article Black Enterprise

Sell High, Buy Low

Magazine article Black Enterprise

Sell High, Buy Low

Article excerpt

NCM's Sloan sticks with growth-stock winners

What goes up often comes down--and may well go back up again. "We're active managers," says Maceo K. Sloan, chief investment officer of NCM Capital Management, based in Durham, North Carolina. "Once the stocks we own hit a target price, we take our profits and go on to other opportunities that seem more attractive."

Thus, of the five stocks he recommended a year ago, only two--America Online (NYSE: AOL) and AES Corp. (NYSE: AES)--are still among his firm's holdings. (The chart on this page tracks 52-week stock performance starting on July 2, 1999.)

Dulles, Virginia-based AOL, which was trading at $111.75 at the time, later split 2-for-l, so his recommendation price was effectively about $57 per share. "The stock went over $95 [a share]," he says, "so we took our profits." Now, AOL, the world's largest Internet service provider, is selling for around $60 per share, and Sloan thinks the stock could climb back up to $90 within the next 12 months.

His other holdover, AES, which was trading at $58.88 at the time of recommendation, later split 2-for-1, which effectively changed the price to $28.41. It then shot up to more than $45 per share. Sloan believes, "The stock has the potential to trade higher."

What about the other companies on last year's list? Mandalay Resort Group (NYSE: MBG) was $22.50 at that time; the stock moved up to more than $25, then retreated to well under $20. Says Sloan, "We're not upbeat on the casino industry, which is out of favor now, so we no longer own the stock:'

Similarly, pharmaceuticals are currently unloved on Wall Street, in part because of fears that federal price controls could trim industry profits. …

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