Newspaper article THE JOURNAL RECORD

Stock Market Pros Pull Some Winners from Slim Pickings

Newspaper article THE JOURNAL RECORD

Stock Market Pros Pull Some Winners from Slim Pickings

Article excerpt

NEW YORK _ One week, popular stock gauges gain and the next, they lose. That has been the pattern for months as the market reacted to rising interest rates and other economic developments that guide investment decisions.

Despite the choppy waters on Wall Street that have given many stocks a rocky ride through 1994, investment professionals have made some profitable picks.

"We've had some great success but it's taken a lot of patience to stick it out," observed James Melcher, president of the New York investment management firm Balestra Capital.

Several small stocks far beyond the blue-chip realm have rewarded Melcher lately by showing signs of approaching what he considers their potential.

"People are out there bargain hunting," he said. "They are starting to bid up certain stocks because they don't want others to beat them to it. They feel the crowd at their heels."

Selections that have started to pay off for Melcher include Consumer Portfolio Services Inc., an Irvine, Calif., provider of so-called non-prime auto loans. The company, which lends to customers who find it hard to get credit, has been quoted at about $15.25 a share in recent days, up from $10.50 six weeks ago. Melcher says that the company could be worth as much as $25 to $30 a share.

"This stock is still a flaming buy," he said.

Another winner for Melcher is Softkey International Inc., a Cambridge, Mass.-based company formed through the merger of several software concerns that has established itself as a leading distributor of low-priced computer software. At the end of August, its stock was trading at $12.87 a share and last week was at $19.62.

Another pleasing choice has been Caere Corp., which designs, manufactures and markets information recognition software and systems. The stock has improved to around $19 a share from about $6.50 just six weeks ago.

Some big name companies can boast fat stock price improvements, too, thanks partly to the herd mentality of mutual fund managers, said Melcher. …

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