Fortune magazine is running a special issue this month on how to “Retire Rich”, and one particularly interesting piece involves 25 stock picks from 25 investors with strong track records, including Bruce Berkowitz, Jeremy Grantham, and David Herro. Here’s a sampling of some of these gurus’ top picks:
Chuck Akre: Akre, who now runs his own fund, averaged 12.6% annual returns for the FBR Focus Fund from 1996-2009. He’s high on convertible preferred shares of Hartford Financial Services Group, which must be converted into common stock in 2013. While hit hard by the 2008 financial crisis, Hartford is now in good shape, Akre says. “It’s an interesting, low-risk, decent turnaround play in a market with a lot of uncertainty,” he tells Fortune.
Bruce Berkowitz: Berkowitz’s Fairholme fund returned 13.2% annually from 1999-2009, beating 99% of his peers. His pick: Goldman Sachs. While the firm has been the subject of fraud allegations, he doesn’t think the SEC case against Goldman will hurt earnings. “It’s a great firm with great people and earnings,” he says. “They’re under a temporary cloud.”
Dennis Delafield: His Delafield Fund has trounced the market over the past decade, averaging 12.1% annualized returns. He’s high on Checkpoint Systems, which makes security and surveillance products for retailers. Delafield thinks it “can come close to increasing earnings by 75% over the next two years,” and also likes Checkpoint’s experienced management team, strong balance sheet, and cheap share valuations, Fortune reports.
John Osterweis: Osterweis has an outstanding long-term track record, with his Osterweis Fund having averaged 11.9% annualized returns over the past 15 years, more than 4 percentage points better than the S&P 500. His top pick: Johnson & Johnson. “That may sound a little conventional,” he tells Fortune, “but it’s a phenomenal stock for someone who doesn’t want a lot of risk and wants to make some money.”