If you ever bump into fund manager Mark Finn, chances are it will be in the scratch ’n’ dent aisle. Not that he needs the savings. As a manager overseeing more than $40 billion at T. Rowe Price TROW, -1.64% , he pulls down a big enough income.
By “high quality,” Finn means companies that have traits like good brands, great management, a strong-market position or duopoly status. I’ll also point out that — like many outperforming managers I have interviewed — Finn beats competitors in part because he takes outsized positions, running up to 5% of his portfolio.
He notes that Boeing has a history of pulling through crises — like the 787 Dreamliner production delays several years ago. He expects a repeat. The company’s stock should journey up to $100 or $110 in a few years from recent levels of around $87 because of the transformation, he says. Edison International The California wildfires did more than just rip through neighborhoods and destroy homes. They also damaged investor sentiment toward California electric utilities, since they sparked the blazes.
DIY investors: Avoid value traps If you try shopping in the scratch ’n’ dent aisle on your own, a basic rule is to avoid the stuff that is so damaged it’s not worth buying. Sometimes this comes down to understanding sector trends.