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When Value Means Growth

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In the process of screening the equity universe for possible inclusion in the Hartford Growth Opportunities Fund, manager Michael Carmen considers a company’s earnings potential two calendar years into the future, and also is open to picking stocks that normally aren’t considered to be growth at all. Take fertilizer stocks, a recent success story for Carmen. “You would think that, ‘Oh, growth investor–fertilizer stocks–that doesn’t make any sense,’ but we identified in 2005 that the dynamics of that sector were setting themselves up to have very explosive growth in 2007, and we took positions in a number of stocks and all those positions worked out extremely well. That was probably one of our best performing sectors last year, and it was because we were not focused on, ‘Well, they’re fertilizer stocks,’ we were focused on the fact that they were going to have very strong top-line growth and very strong earnings which were going to be much better than expectations, and that’s what drove us to buy those kinds of positions.”