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.
| LARGE-CAP STOCKS |
| Stock |
Symbol |
Price $
as of 5/27/03 |
Why it's in the portfolio |
Discount to fair market value % |
| AFLAC |
AFL |
33 |
Aging boomers driving demand for supplemental health insurance policies. |
8 |
| CVS |
CVS |
26 |
Shares of rapidly expanding drug chain significantly undervalued. |
43 |
| Everest Re Ltd |
RE |
71 |
Big pricing gains expected to boost reinsurer's earnings 56% this year. |
17 |
| Gannett |
GCI |
77 |
Newspaper chain's savvy management team consistently delivers. |
6 |
| Gap |
GPS |
17 |
New CEO Paul Pressler is dressing up the khaki king for success. |
47 |
| Johnson & Johnson |
JNJ |
53 |
Seller of everything from Band-Aids to Tylenol is paragon of financial health. |
16 |
| Medtronic |
MDT |
49 |
Wave of major new products will keep medical giant's earnings surging. |
10 |
| Microsoft |
MSFT |
25 |
Software giant using cash hoard to drive R&D and revive growth. |
36 |
| Occidental Petroleum |
OXY |
34 |
Major oil producer paying down debt, improving margins by cost cutting. |
19 |
| Pfizer |
PFE |
32 |
Drug powerhouse has nearly a dozen blockbusters and a well-stocked pipeline. |
30 |
| SLM |
SLM |
114 |
Rising college enrollment and tuition costs will boost lender's earnings. |
7 |
| Stryker |
SYK |
67 |
Medical-device giant expected to boost earnings nearly 20% a year. |
16 |
| Tribune |
TRB |
50 |
Ad-driven multimedia business poised to profit from economic upswing. |
6 |
| UnitedHealth Group |
UNH |
95 |
Big health insurer--a repeat pick--just raised its earnings forecast. |
17 |
| Wal-Mart Stores |
WMT |
53 |
World's biggest, most powerful retailer still has plenty of room to grow. |
17 |
| SMALL- AND MID-CAP STOCKS |
| Stock |
Symbol |
Price $
as of 5/27/03 |
Why it's in the portfolio |
Discount to fair market value % |
| C.H. Robinson Worldwide |
CHRW |
36 |
Logistics company has a unique business model--and no debt. |
13 |
| C.R. Bard |
BCR |
68 |
Supplier of diverse medical products is cutting costs and selling assets. |
10 |
| Coventry Health Care |
CVH |
43 |
Small health insurer is growing fast in wealthy markets. |
11 |
| HCC Insurance Holdings |
HCC |
28 |
Property and casualty insurer in sweet spot of industry's cyclical upswing. |
8 |
| IDX Systems |
IDXC |
16 |
Software company is the panacea for doctors' administrative woes. |
42 |
| Invitrogen |
IVGN |
39 |
Biotech firm's research tools vastly simplify genetic and molecular research. |
37 |
| Pacific Sunwear of Calif. |
PSUN |
21 |
Teen-clothing retailer stays hip through extensive customer research. |
10 |
| Patterson Dental |
PDCO |
44 |
Fast-growing dental-supply company's earnings will make investors smile. |
22 |
| Pogo Producing |
PPP |
43 |
Small oil-and-gas explorer boosting production at a rapid clip. |
12 |
| Safeco |
SAFC |
37 |
Diversified insurance company is profitable and growing once again. |
14 |
| SanDisk Corp |
SNDK |
34 |
Supplies crucial memory components for popular consumer gadgets. |
30 |
| Steris |
STE |
22 |
Demand for firm's surgical sterilization systems fueling explosive growth. |
27 |
| W.R. Berkley |
BER |
48 |
Connecticut-based insurer selling at a discount compared with peers. |
15 |
| Western Digital |
WDC |
12 |
Disk-drive maker moving into hot set-top box and videogame markets. |
30 |
| Texas Regional Bancshares |
TRBS |
35 |
Little bank nets big margins by providing range of products and top service. |
11 |
| INTERNATIONAL |
| Stock |
Symbol |
Price $
as of 5/27/03 |
Why it's in the portfolio |
Discount to fair market value % |
| ABN Amro Holding |
ABN |
18 |
Restructured banking giant now ready to expand across Europe and U.S. |
15 |
| Diageo |
DEO |
43 |
Drinks company still selling plenty of Guinness, Smirnoff, and Tanqueray. |
10 |
| Novo-Nordisk |
NVO |
37 |
Danish drugmaker has top diabetes franchise and stocked pipeline. |
7 |
| Total |
TOT |
73 |
Premier French oil giant is pursuing aggressive production targets. |
12 |
| Unilever |
UN |
60 |
Netherlands-based food giant sees restructuring beginning to pay off. |
10 |
| FIXED-INCOME FUNDS |
| Fund |
Symbol |
Why it's in the portfolio |
Manager, tenure |
| Calamos Growth & Income |
CVTRX |
Boutique firm specializes in convertible securities. |
John & Nick Calamos, 15 yrs. |
| Dodge & Cox Income |
DODIX |
Veteran team has a stellar long-term record. |
Dana Emery, 13 yrs. |
| Fremont Bond |
FBDFX |
Cheaper way to tap into the genius of Pimco's Gross. |
Bill Gross, 9 yrs. |
| Pimco Foreign Bond |
PFOAX |
Foreign-currency hedging leads to low volatility. |
Sudi Mariappa, 3 yrs. |
| Vanguard S-T Bond Index |
VBISX |
Low credit risk and even lower expenses make it a gem. |
Ian MacKinnon, 2 yrs. |
