AIM Large Cap Basic Value ALCBAX

Morningstar Rating

Fund Research and Analysis

by Ryan Leggio

AIM Large Cap Basic Value should continue its recovery.

We wrote in May about this fund's potential. At that point, the fund had recovered more than 50% from its March low. Through Sept. 29, 2009, it has recovered another 21% on top of that, handily outpacing the S&P 500. Read more

Kudos

Seasoned management.

Willing to go against the herd. Read more

Risks

Bret Stanley's ideas sometimes take time to pan out, so the fund can experience extended dry spells.

Can venture into traditional growth areas.

If management strays too far from its circle of competence, shareholders can be stung hard, given's this fund's concentrated makeup.

Could be cheaper. Read more

Strategy

Managers Bret Stanley, Matt Seinsheimer, Michael Simon, and R. Canon Coleman II perform discounted cash-flow analysis to estimate what a company is worth. They like to buy those whose stocks have a minimum 50% appreciation potential to calculated intrinsic value, which often leads them to controversial areas. Read more

Management

Bret Stanley and Matt Seinsheimer have managed this fund since its June 1999 inception, and Michael Simon joined them in January 2002, while R. Canon Coleman II came aboard in March 2003. The team also manages AIM Basic Value, which has generally done well since Stanley and Seinsheimer came on board, and AIM Mid Cap Basic Value MDCAX, which the team launched at the end of 2001. Read more

Inside Scoop

This fund buys about 50 large-cap companies that management believes have at least 50% upside potential, as determined by a discounted cash-flow model. Value is rightfully part of this fund's moniker, but stereotypical growth stocks aren't ignored. Read more

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