November 10, 2011 / 2:42 AM / 8 years ago

Top US money managers offer stock tips at Chicago charity event

* Charming Shoppes gets top nod from money mgr at event

* Lowes, Toll Brothers top picks on housing recovery-mgr


By James Kelleher

CHICAGO, Nov 9 (Reuters) - A luxury home builder. A hardware chain. A plus-size clothing retailer.

Those were some of the companies getting shoutouts on Wednesday as nearly a dozen of the country’s top money managers shared their best investment ideas for 2012 at a fund-raiser for children’s charities in Chicago.

Leon Cooperman, the billionaire former head of Goldman Sachs’ asset management arm and the founder of Omega Advisors, told the audience of about about 800 people, who each paid between $500 and $1,000 to get in, that his top pick for the coming year was Charming Shoppes Inc .

Cooperman said the Pennsylvania-based company, which operates the Lane Bryant, Fashion Bug and Catherines Plus Sizes clothing stores, was “a beneficiary of the world we live in ... In 1986, the average woman’s size was 8. The average woman’s size today is 16.”

He estimated the company’s current market value was half what it should be and predicted Charming Shoppes would be acquired — perhaps within the next year.

Barry Sternlicht, the founder of Starwood Capital Group, expressed optimism that the U.S. housing market was heading for a recovery. He cited “several encouraging trends,” including falling foreclosure and delinquency rates, and even — when distressed and distressed property sales are excluded — rising home prices.

So Sternlicht, the former chairman and CEO of Starwood Hotel and Resorts, said his top picks were all housing-related, including DIY retailer Lowes Companies Inc and luxury homebuilder Toll Brothers Inc .

“The recovery of the housing market in the United States is a when, not if,” Sternlicht said, “It will recover.”

Thomas Russo, who oversees $4 billion in separate managed accounts at Gardner, Russo and Gardner, said that despite the current turmoil on the continent, two of his favorite stock picks were European companies: Nestle , the Swiss-based food company, and Pernod Ricard , the French alcoholic beverage company.

“The news of the day doesn’t look very good,” Russo, referring to the possibility that Italy would become the latest European country to spin into a sovereign debt crisis.

“But my business, as a value investor, is to look for 50 cent dollar bills,” Russo said. “They’re rare to find but you can find them. And I’d say there’s no better place to pick at the moment than Europe, which is so collectively feared and despised.”

The consensus on Wednesday was that the situation in Europe would work itself out and that the United States would avoid falling back into recession.

But Cooperman echoed the feelings of several speakers when he said the next few years would be hard on millions.

“It is not going to be a feel-good environment,” he said. One in every five workers is either underemployed or unemployed and that is not going to make for a happy environment.”

Other investment managers offering up ideas at the event on Wednesday included Sam Zell, the chairman of Equity Group Investments, John Keeley, the founder of Keeley Asset Management, and Marc Lasry, the chairman and chief executive of Avenue Capital Group.

The third annual Invest for Kids event raised more than $1 million for seven Chicago-area children’s charities, according to spokeswoman Molly Bett Kovler, including the Illinois Education Foundation, Open Books, the Daniel Murphy Scholarship Fund and the Bear Necessities Pediatric Cancer Foundation.

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