Investors Play Defense, Warns Lazorishak of Chase Investment Counsel

TOM HUDSON: A slow growing economy is not necessarily bad for stocks, just look at
today’s close at two and a half year highs. But tonight’s “Market Monitor”
is also playing some defense. Brian Lazorishak is along with us, a new
“Market Monitor.” He’s a portfolio manager at Chase Investment Counsel
tonight with us from Charlottesville, Virginia. Brian, welcome to NBR.
It’s nice to see you.

BRIAN J. LAZORISHAK, SR. VP & PORTFOLIO MANAGER, CHASE INVESTMENT
COUNSEL CORP. OF CHARLOTTESVILLE: Nice to see you, thanks for having me,
Tom.

HUDSON: We’ve seen a sharp rally this year, a sharp rally in small
mid cap and big cap since October. Have the downside risks increased with
this rally we’ve seen?

LAZORISHAK: Well, I think you have to pay attention to the downside
risks. We think there may be room left to the upside. But one of the
things we do with our fund is always pay attention to the downside and try
to manage those risks too.

HUDSON: You manage the risks at a time when we are seeing earnings
growth slow down at the same time for the broad market. Does that concern
you?

LAZORISHAK: Well, it’s a little bit concerning for the broader
market. But I think we’re still able to identify plenty of stocks that
have strong and in some cases even accelerating earnings growth. So to the
extent that we can focus our stock picking on the right areas we should
have success.

HUDSON: You’ve got the stock picks here along with us to consider
beginning with Dollar Tree (NASDAQ:DLTR), the low cost retailer. And it has
had one heck of a rally over the past year, below $50 to tonight, almost
$90 per share. We’ve got to ask, Dollar Tree (NASDAQ:DLTR), as it operates
in this low end retail space, does the stock have much room to run after
this big rally?

LAZORISHAK: Dollar Tree (NASDAQ:DLTR) has been a good performer for
us, but we do think it still has room to go. They continue to execute very
well. Dollar Tree (NASDAQ:DLTR) has about 4400 stores selling everything
at a dollar. They continue to grow their store base. And we think if they
can continue to grow square footage at about 5 percent a year, same store
sales at about 5 percent a year and some improvement in margins which
they’ve been able to do through things like adding refrigerators and
freezers to their store, this is a company that can continue to pump out 20
percent earnings growth. If they can keep doing that, then the stock should
continue to work higher.

HUDSON: Some enviable growth rate there for retail especially with a
retailer that size. What about Neustar (NYSE:NSR), NSR the ticker symbol on
this one. It’s a telecommunications services company. If anybody has
changed mobile phone carriers and kept the same phone number, Neustar
(NYSE:NSR) has a hand in there with number portability, right?

LAZORISHAK: Neustar (NYSE:NSR) provides the directories that manage
virtually all the area codes, telephone numbers in the United States.
These are through long-term contracts with price risers in them. So the
company has about 50 percent of their business that is contractually rising
at about 10 percent a year. On top of that, they have some new areas of
growth that are pretty exciting. They made an acquisition last year of a
company called Targis ID that has caller ID and customer data, as well
as involvement in what some of the viewers may have heard of, a service
called ultraviolet. Many of the movie studios are behind this ultraviolet
service which you can think of as a digital locker to store data files and
access movies digitally. They are involved in that. And we think that’s an
exciting area for growth.

HUDSON: Pretty interesting play. Just 20 seconds left but I want to
get to this unique energy play you’ve got with Kirby (NYSE:KEX), KEX, a
barge operator. Why get into transportation for petroleum products instead
of the oil or diesel itself?

LAZORISHAK: Well, Kirby (NYSE:KEX) is a very interesting play.
They’re really benefiting from solid fundamentals in their industry. They
are running at almost full capacity as the largest inland tank barge
operator in the United States. So pricing is very strong. And they’re
making money in a lot of different ways whether it’s moving petroleum
products from shale plays, moving chemical products, moving product to
refineries, along the Mississippi River.

HUDSON: Do you have positions in these stocks yourself?

LAZORISHAK: I do own these positions through our mutual fund.

HUDSON: Our Friday “Market Monitor,” Brian Lazorishak. He’s with
Chase Investment Counsel.


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