Some top stock picks
The mutual fund managers listed below are skeptical that consumer spending will rebound anytime soon, but they still like some consumer stocks. Here are some of their top picks:
Randall Greer, manager of the First Focus Core Equity Fund:
Pick: Comcast Corp.
Why: Cable TV is relatively resistant to reduced consumer spending.
Pick: Consumer staples stocks Pepsico Inc. , Procter & Gamble Co. , HJ Heinz Co. and Kimberly-Clark Corp.
Why: All have relatively stable demand, large international markets and significant dividend yields.
Pick: Walgreen Co.
Why: Stable demand for prescriptions, and the stock benefits from increasing use of generic drugs.
Jason Schrotberger, who covers consumer stocks at Turner Investment Partners and co-manages some of the firm’s funds:
Pick: Kohl’s Corp instant cash advance.
Why: Unlike many rivals, the department store chain cut costs and inventory early in the recession, and has recently expanded market share.
Pick: Guess Inc.
Why: Clothing retailer’s cutting-edge fashions are unique, and should prove durable through the recession.
Ron Muhlenkamp, manager, Muhlenkamp Fund:
Pick: Goodyear Tire & Rubber Co.
Why: Tire maker is benefiting in the recession from increased demand for replacement tires for older vehicles, which is more profitable than supplying tires for new cars.
Filed under: economics by TheDoor