Originally created 12/03/01

Of mutual interest

NEW YORK - Despite a flurry of reports saying this holiday shopping season will be the worst in a decade, some mutual-fund managers contend that there are retail stocks worth buying.

Retailing stocks have started to benefit from the year's 10 interest-rate cuts and have promising futures as consumers and investors look forward to next year, the fund managers say.

Kevin L. Wenck, manager of Polynous Growth: A, said he found some bargains soon after trading resumed after the Sept. 11 attacks, when investors sold off many retailers by as much as 40 percent. He purchased shares of growth retailers, which he defined as companies whose earnings are rising by double digits but that have a low price relative to their profits.

Among those companies, he said, are The Children's Place, Abercrombie & Fitch Co. and American Eagle Outfitters Inc.

"In late September, I bought a whole bunch of what you call growth retailers for just 10 times earnings," Mr. Wenck said. "I am pretty happy owning debt-free companies growing at 20 percent a year at 10 times earnings."


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