Magazine article Black Enterprise

The Value of Discounting: Harold Singleton's Discount Strategy Offset Market Volatility. (Stock Update)

Magazine article Black Enterprise

The Value of Discounting: Harold Singleton's Discount Strategy Offset Market Volatility. (Stock Update)

Article excerpt

Harold Singleton was right last year when he proclaimed that there is value in any market if you know where to look. The senior vice president of Metropolitan West Capital Management in Newport Beach, California, explained that his firm is "looking to buy stocks that are selling at a discount of their intrinsic value," meaning Singleton focuses on a company's tangible worth, such as the real value of a stock. His firm looks for stocks with a three-year investment time horizon in mind.

Most people would want to have Singleton's selections in their portfolio. To calculate the total return for Singletons portfolio, we excluded Conoco (now ConocoPhillips) as a result of its August 2002 merger with Phillips Petroleum. The remaining stocks from his Private Screening scored a modest 3.57% gain during the period of Dec. 11, 2001, to Dec. 6, 2002. By comparison, the Dow Jones industrial average fell 12.57%, going from 9,888.40 to 8,645.77 and the Standard & Poor's 500 index dropped 19.75%, going from 1,136.76 to 912.23 during the same time period.

"I'm still optimistic about all these stocks, and I still hold them in my portfolio," says Singleton. He was particularly hopeful about Clear Channel Communications (NYSE: CCU), which lost ground, dropping 14.62% from $48.3 to $41.30. Singleton says the company, which owns 1,200 radio stations across the country, was an unfortunate casualty of the down market, but he expects it to get a boost when the advertising climate picks up. …

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