Q. Do you think my shares of DirecTV Group Inc. can continue to do well? - BT, via the Internet

A. The largest US satellite television producer must always move quickly to stay ahead of the competition.

Veteran executive Michael White, who had been in charge of PepsiCo's international business, became DirectTV's new CEO in January. His predecessor, Chase Carey, departed after six years to become the COO of Rupert Murdoch's News Corp.

DirecTV is introducing a 3D high-definition TV channel; has launched a new satellite to boost HD capacity; and is raising its rates a little over four percent starting in February.

Shares of DirecTV rose 46 percent last year. The company, which increased subscribers and earned a profit of $366 million in its third quarter, has a strong balance sheet.

The firm's programming strength includes exclusive content, such as NFL Sunday Ticket that airs out-of-market games to football fans. An indication of how important that coverage is occurred in March when it agreed to pay the National Football League $1 billion annually to extend the contract another five years.

DirecTV boasts the industry's widest selection of high-definition networks, as well as satellite television operations in Latin America, three regional sports networks and stakes in the Game Show Network and FUN Technologies. Its size and national coverage are impressive.

The consensus analyst opinion on DirecTV shares among Wall Street analysts is "buy," according to Thomson Reuters, consisting of seven "strong buys", 10 "buys" and three "holds".

Chairman of the company is John Malone, the cable industry pioneer whose Liberty Media Corp. has a controlling stake in DirectTV.

It is a demanding business. The cable industry's ability to combine phone with high-speed Internet and TV make it a formidable opponent, while telephone companies are also competitive as they upgrade their networks around the country.

DirecTV has relationships with the AT&T, Verizon and Qwest phone companies and there has therefore been speculation that one of them may attempt to acquire DirecTV. Most recently, Verizon denied such ambitions, noting that DirecTV is a good partner. There's also speculation that DirecTV could merge with rival DISH Network.

Earnings are expected to increase 59 percent in 2010 and the three-year annualised return is projected to be 21 percent versus the 10 percent rise predicted for the communication equipment industry.

Q. Is Victory Diversified Stock Fund worth putting my money in? - BB, via the Internet

A. You're betting on an experienced portfolio manager, a strategy based primarily on sectors and a performance record that is comparable to some of the best-known large-cap funds.

Larry Babin has been the lead portfolio manager since the fund's inception in 1989, turning out strong large-cap stock returns while diverging a bit from the Standard & Poor's 500 benchmark.

The $4 billion Victory Diversified Stock Fund gained 30 percent over the past 12 months to rank at the midpoint of large growth and value funds. Its three-year annualized decline of 3 percent puts it in the top one-third of its peers.

"Victory Diversified Stock Fund analyzes different sectors, making a call on which sectors are more attractive while not taking huge bets on them," said Greg Carlson, analyst with Morningstar Inc. in Chicago, who considers the fund a core investor holding.

"They sell stocks once they reach their estimate of value, which means on average they only hold a stock for about a year."

Babin is assisted by co-managers Paul Danes and Carolyn Rains, as well as the Victory Capital Management staff of 12 research analysts. With a portfolio of around 50 stocks, they look for stocks trading below their historical valuations that have a catalyst in place to provide earnings growth.

The managers steered clear of the stock of major US banks going into the financial crisis, which is why the fund held up better than some competitors. Making mistakes on sectors could hurt potentially the fund, but that problem is alleviated by not over-committing to any one of them. It is a steady fund that hasn't had any really bad years since it was launched.

As Carlson of Morningstar puts it: Victory Diversified Stock Fund grinds out small victories most of the time, and that has made it a long-term winner.

Industrial materials and hardware each represent about 16 percent of portfolio, with other sector concentrations such as healthcare and energy even smaller. Top stocks were recently Schlumberger, Lowe's Companies, Halliburton, EMC, United Parcel Service, Nucor, Intel, CVS Caremark, Charles Schwab and Alcon.

This 5.75 percent "load" (sales charge) fund requires a $2,500 minimum initial investment and has a reasonable annual expense ratio of 1.04 percent.

Q. How can I check on the financial strength of my bank? - BU, via the Internet

A. So long as your money is fully protected by deposit insurance, the possibility of a bank failure isn't one you need worry about.

Basic Federal Deposit Insurance Corp. coverage is $250,000 per depositor per insured bank, which does not include stocks, mutual funds, life insurance policies, annuities or municipal securities.

If you're in the process of choosing a bank, however, the Bankrate.com site does rate 16,000 federally chartered US banks, thrifts and credit unions on considerations such as capital adequacy, asset quality, profitability and liquidity. Its system applies 22 tests to each institution to measure its strength.

"Our ratings go from a low of one star to a high of five stars, with most institutions falling in the three to four star range," said Greg McBride, financial analyst with Bankrate.com, North Palm Beach, Fla. "It is not meant to be a predictor of failure, but you can access information that points out areas of deficiency."

Regardless of a bank's financial health, if your deposits are in excess of the insurance limits you should put money in different ownership categories or move money to other banks.

Andrew Leckey answers questions only through the column. Address inquiries to Andrew Leckey, 555 North Central Ave., Suite 302, Phoenix, Arizona 85004-1248, or by e-mail at andrewinvaol.com

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