Bargain Hunting Beyond Financials

Oak Value manager says the market holds plenty of deals for long-term investors.


There has been talk lately about bargain hunting among financial stocks, but there are plenty of deals to be had elsewhere. I recently had coffee with Larry Coats of the Oak Value fund, who says it's a "target-rich environment" out there.

Companies substantially off their recent highs include high-end retailers Coach and Tiffany, which are both "premium brands with pristine balance sheets and very high returns on capital," says Coats. He adds that Oracle, which is trading at 14 times forward earnings, and Medtronic, trading at 16 times forward earnings, are also compelling. "Medtronic is a high-quality business you couldn't typically buy in the niche they have at 16 times earnings, unless there was some dislocation in the market," says Coats.

Coats is quick to note that these companies are good bets for buyers with at least a three-year investing horizon. He's a value investor, after all.