The good news? Last year's portfolio beat the market. The better news? Here's a new
list of investments that can do it again. It's a diversified portfolio of small-, mid-,
and large-cap domestic and international stocks, as well as a few choice fixed-income
investments. Taken together, they represent FORTUNE's best ideas for the year
ahead. For the proper balance, asset classes in the portfolio are weighted as follows:
large-cap domestic stocks, 37.5 percent; small- and mid-caps, 37.5 percent; international,
10 percent; and fixed-income funds, 15 percent.
FORTUNE 40 gains are measured from May 27, 2003, when the new list was assembled. Note
that only capital gains are measured -- this page does not include dividends, which boost
the real return, especially for fixed-income investments.
| LARGE-CAP STOCKS |
| Stock |
Symbol |
Price
on 5/27/03 |
Price
on 6/18/04 |
Return |
Why it's in the portfolio |
| AFLAC |
AFL |
$32.80 |
$40.55 |
23.63% |
Aging boomers driving demand for supplemental health
insurance policies. |
| CVS |
CVS |
$25.98 |
$41.96 |
61.51% |
Shares of rapidly expanding drug chain significantly
undervalued. |
| Everest Re Ltd |
RE |
$71.26 |
$81.70 |
14.65% |
Big pricing gains expected to boost reinsurer's earnings
56% this year. |
| Gannett |
GCI |
$76.52 |
$86.85 |
13.5% |
Newspaper chain's savvy management team consistently
delivers. |
| Gap |
GPS |
$16.85 |
$24.46 |
45.16% |
New CEO Paul Pressler is dressing up the khaki king for
success. |
| Johnson & Johnson |
JNJ |
$53.42 |
$55.25 |
3.43% |
Seller of everything from Band-Aids to Tylenol is paragon
of financial health. |
| Medtronic |
MDT |
$49.49 |
$49.12 |
-0.75% |
Wave of major new products will keep medical giant's
earnings surging. |
| Microsoft |
MSFT |
$24.79 |
$28.35 |
14.36% |
Software giant using cash hoard to drive R&D and
revive growth. |
| Occidental Petroleum |
OXY |
$33.28 |
$48.24 |
44.95% |
Major oil producer paying down debt, improving margins by
cost cutting. |
| Pfizer |
PFE |
$31.97 |
$35.43 |
10.82% |
Drug powerhouse has nearly a dozen blockbusters and a
well-stocked pipeline. |
| SLM |
SLM |
$37.87 |
$39.62 |
4.62% |
Rising college enrollment and tuition costs will boost
lender's earnings. |
| Stryker |
SYK |
$66.60 |
$54.26 |
-18.53% |
Medical-device giant expected to boost earnings nearly
20% a year. |
| Tribune |
TRB |
$50.23 |
$46.81 |
-6.81% |
Ad-driven multimedia business poised to profit from
economic upswing. |
| UnitedHealth Group |
UNH |
$47.68 |
$64.00 |
34.23% |
Big health insurer -- a repeat pick -- just raised its
earnings forecast. |
| Wal-Mart Stores |
WMT |
$52.50 |
$55.62 |
5.94% |
World's biggest, most powerful retailer still has plenty
of room to grow. |
| SMALL- AND MID-CAP STOCKS |
| Stock |
Symbol |
Price
on 5/27/03 |
Price
on 6/18/04 |
Return |
Why it's in the portfolio |
| C.H. Robinson Worldwide |
CHRW |
$36.07 |
$43.00 |
19.21% |
Logistics company has a unique business model -- and no
debt. |
| C.R. Bard |
BCR |
$68.01 |
$57.46 |
-15.51% |
Supplier of diverse medical products is cutting costs and
selling assets. |
| Coventry Health Care |
CVH |
$43.32 |
$50.33 |
16.18% |
Small health insurer is growing fast in wealthy markets. |
| HCC Insurance Holdings |
HCC |
$28.32 |
$32.32 |
14.12% |
Property and casualty insurer in sweet spot of industry's
cyclical upswing. |
| IDX Systems |
IDXC |
$16.25 |
$29.36 |
80.68% |
Software company is the panacea for doctors'
administrative woes. |
| Invitrogen |
IVGN |
$38.60 |
$67.12 |
73.89% |
Biotech firm's research tools vastly simplify genetic and
molecular research. |
| Pacific Sunwear of Calif. |
PSUN |
$20.67 |
$20.42 |
-1.21% |
Teen-clothing retailer stays hip through extensive
customer research. |
| Patterson Dental |
PDCO |
$43.92 |
$74.96 |
70.67% |
Fast-growing dental-supply company's earnings will make
investors smile. |
| Pogo Producing |
PPP |
$43.13 |
$48.65 |
12.80% |
Small oil-and-gas explorer boosting production at a rapid
clip. |
| Safeco |
SAFC |
$36.99 |
$41.80 |
13.00% |
Diversified insurance company is profitable and growing
once again. |
| SanDisk Corp |
SNDK |
$34.43 |
$20.37 |
-40.84% |
Supplies crucial memory components for popular consumer
gadgets. |
| Steris |
STE |
$22.20 |
$22.64 |
1.98% |
Demand for firm's surgical sterilization systems fueling
explosive growth. |
| W.R. Berkley |
BER |
$48.37 |
$43.08 |
-10.94% |
Connecticut-based insurer selling at a discount compared
with peers. |
| Western Digital |
WDC |
$11.70 |
$9.20 |
-21.37% |
Disk-drive maker moving into hot set-top box and
videogame markets. |
| Texas Regional Bancshares |
TRBS |
$35.18 |
$43.29 |
23.05% |
Little bank nets big margins by providing range of
products and top service. |
| INTERNATIONAL |
| Stock |
Symbol |
Price
on 5/27/03 |
Price
on 6/18/04 |
Return |
Why it's in the portfolio |
| ABN Amro Holding |
ABN |
$18.20 |
$21.58 |
18.57% |
Restructured banking giant now ready to expand across
Europe and U.S. |
| Diageo |
DEO |
$43.06 |
$55.09 |
27.94% |
Drinks company still selling plenty of Guinness,
Smirnoff, and Tanqueray. |
| Novo-Nordisk |
NVO |
$37.40 |
$49.50 |
32.35% |
Danish drugmaker has top diabetes franchise and stocked
pipeline. |
| Total |
TOT |
$72.60 |
$99.14 |
36.56% |
Premier French oil giant is pursuing aggressive
production targets. |
| Unilever |
UN |
$59.63 |
$68.41 |
14.72% |
Netherlands-based food giant sees restructuring beginning
to pay off. |
| FIXED-INCOME FUNDS |
| Fund |
Symbol |
Share price
on 5/27/03 |
Share price
on 6/18/04 |
Return |
Why it's in the portfolio |
| Calamos Growth & Income |
CVTRX |
$24.44 |
$27.74 |
13.50% |
Boutique firm specializes in convertible securities. |
| Dodge & Cox Income |
DODIX |
$13.13 |
$12.70 |
-3.27% |
Veteran team has a stellar long-term record. |
| Fremont Bond |
FBDFX |
$10.78 |
$10.34 |
-4.08% |
Cheaper way to tap into the genius of Pimco's Gross. |
| Pimco Foreign Bond |
PFOAX |
$10.85 |
$10.38 |
-4.33% |
Foreign-currency hedging leads to low volatility. |
| Vanguard S-T Bond Index |
VBISX |
$10.45 |
$10.08 |
-3.54% |
Low credit risk and even lower expenses make it a gem. |
