Desert Island Keepers - stocks favored by mutual fund managers

Kiplinger's Personal Finance Magazine, July, 2000 by William Patalon, III

King of wireless

WITH ITS PROSPECTS for continued brisk growth worldwide, the telecom sector is popular with investors. So it's no surprise that the British-based wireless-phone provider Vodafone AirTouch (VOD, $39) is the desert-island pick of Howard Moss, who co-manages Harbor International Growth fund. (In the U.S. market, Vodafone tracks as an ADR, or American depositary receipt. One ADR represents ten ordinary shares of Vodafone, whose primary listing is in London.)

Vodafone (see "Go Global," May) recently gained control of Germany's Mannesmann in a deal valued at almost $200 billion. Already a heavy hitter in the U.S. and Britain, Vodafone is now the world's biggest wireless-phone company. It is active in 15 European countries as well as Australia, Japan, New Zealand and South Korea. Its customer base may grow quickly as people begin connecting to the Internet via wireless providers. Declares Moss: "This is the most powerful company in the whole industry."

Analysts estimate that Vodafone's earnings-growth rate will be 30%, says First Call. But Moss believes that profits may rise even faster. In fiscal 2001, which ends next March, the consensus of analysts is that earnings will be 95 cents per share, a 48% jump from the expected 64 cents for fiscal 2000.

"If I'm going to be marooned on a desert island for five years," says Moss, "I can be very confident this company will still be around when I get back." In the meantime, Moss might use a Vodafone account to follow up on an idea of Acorn's Wanger: Order up an airlift of "a case of rum, some of those little paper umbrellas and some ice. A big bag of ice."

--Reporter: JUSTIN WISER

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