NEW YORK – “We’re slightly overweighted in technology, which is weird given that we were underweighted six months ago,” muses Thyra Zerhusen, portfolio manager of the Alleghany/Chicago Trust Talon Fund (CHTTX) , a mid-cap blend fund with $30 million under management.

Despite the weakness in technology, Zerhusen’s bet on stocks such as Unisys (nyse: UIS – news – people) and Legato Systems (nasdaq: LGTO – news – people) has helped the fund post a 7% return so far this year versus a 4% decline in the Standard & Poor’s MidCap 400 Index.

Like other successful growth investors, Zerhusen keeps an eye on value. On a price-to-earnings basis, this means choosing stocks trading at estimated P/Es that are less than the projected earnings growth.

Full story at Forbes.com

NEW YORK – Inktomi is one of the stocks featured in Larry Waschka’s new book, Ten Stocks That Could Change the World. Foster City, Calif.-based Inktomi specializes in search software and applications for speeding up Internet traffic. Customers include high-profile names such as Yahoo! and Reuters.

Waschka surely didn’t pick Inktomi (nasdaq: INKT – news – people) for its profitability. In 2000 the company lost $9 million, or 9 cents a share, and is expected to earn less than a penny a share this year.

“I don’t use multiples such as P/E,” says Waschka, a hedge fund manager and author of The Complete Idiot’s Guide to Getting Rich and co-author of Managing Family Trusts. To value these stocks, Waschka prefers to use ratios such as price-to-tangible book value (book value excluding goodwill) and price-to-sales (price divided by trailing sales per share). In fact, based on trailing 12-month sales, Inktomi’s price-to-sales ratio comes in at 6. Waschka calls a price-to-sales ratio of 10 ideal for a company that has superior growth potential.

Full story at Forbes.com

A powerful movement in the U.S. over the past several decades is the de-integration of manufacturing: Witness, for example, the rise of such horizontal companies as Intel, Microsoft, Dell and Oracle in a field that was once dominated by the vertically integrated IBM. But for every trend there is a countertrend from which investors can make money. On this page we focus on companies that are conspicuous for their degree of vertical integration.

Furniture Brands International manufactures furniture in 20 plants and retails the goods in some 100 franchise-owned stores in the U.S. (under the Thomasville brand). It’s a smart strategy, says Margaret Whelan, an analyst at UBS Warburg, not adequately recognized in the multiple (11 times estimated 2001 profits) at which Furniture Brands trades.

Full story at Forbes.com