Subject: [NEXTEL-1] Evergreen manager looks for edge- Craven likes Cheesecake Factory, Nextel, Brown & Brown

From: Marcel <[email-masked]>
Date: Thu, 31 Oct 2002 10:36:49 -0500

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THE STOCKPICKERS

Evergreen manager looks for edge
Craven likes Cheesecake Factory, Nextel, Brown & Brown

By Luisa Beltran, CBS.MarketWatch.com
Last Update: 12:05 AM ET Oct. 31, 2002

NEW YORK (CBS.MW) -- Evergreen Emerging Growth fund manager Gary Craven searches for companies with an edge, touting merchandise or services that people want.

"We look for superior companies with a competitive advantage, that offer a differentiated product that people are willing to pay more for," Craven said.

According to Lipper data, the Evergreen Emerging Growth Fund (EKAAX:
news,
chart,
profile) has performed in the top two quartiles for the one-year and three-year time periods.

Craven's sweetest pick is the Cheesecake Factory Inc., a casual dining restaurant chain, which serves up more than 50 different types of cheesecake. The Calabasas, Calif.-based company has about 60 restaurants and recently opened up in Boston. Craven expects square footage to grow by 25 percent a year, higher than average.

"They really execute their concept well and are a very attractive investment," he said. Shares of Cheesecake Factory (CAKE:
news,
chart,
profile), down about 24 percent from their 52-week high of $43.55, shed $1.11, or 3.19 percent, to $34.18 in afternoon trading Wednesday.

While over-expansion and corporate scandals have hit the telecom industry hard, Nextel Communications (NXTL:
news,
chart,
profile) seems to be dodging the bullet. The wireless services provider has about $14 billion in long-term debt, but will be cash flow profitable by the end of 2002, Craven said. "They are generating good margins on subscriber growth and starting to generate cash," he said. "They've dug themselves out of too much debt."

In addition to its wireless offerings, Nextel also offers direct connect, its digital "walkie-talkie" services that let customers call friend without using a cell phone. "Nextel's two-way communication is different from other wireless operators," Craven said. Shares of Nextel, down nearly 12 percent from their year high of $12.31, added 74 cents, or 7.32 percent, to $10.85 in recent trading.

Insurance broker Brown & Brown Inc. is Craven's last pick. Due to last year's terrorist attack and high casualty losses from hurricanes, insurance rates are on the rise. "It's a nice little business," Craven said. "When rates go up, revenue goes up but cost doesn't necessarily go up." Daytona, Fla.-based Brown provides property/casualty, life and health insurance. Craven sees an upside for Brown & Brown (BRO:
news,
chart,
profile) shares, which gained 31 cents, or 1.04 percent, to $30.10. "With a favorable tailwind this stock could hit $40," he said.
Luisa Beltran is a reporter for CBS.MarketWatch.com in New York.

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