Fund manager picks the stocks and sectors that investors should play right now
Portfolio manager Chad Morganlander named a raft of sector and stock plays for investors right now, and revealed he was bullish on small-cap names. Referring to the performance of the Russell 2000 , a U.S. focused small-cap benchmark, the senior portfolio manager at Washington Crossing Advisors noted that these smaller firms have been on an uptrend and “could continue to get a lift.” “The Russell 2000 at the end of the quarter was about two standard deviations from the norm regarding valuation with the broader markets, in particular, when it came to growth,” Morganlander told CNBC’s ” Street Signs Asia ” on Tuesday. The benchmark had a tough start to the year but is up 12% year-to-date. For comparison, the S & P 500 is 18.8% higher, while the Nasdaq 100 has gained 21.7%. Besides small-cap stocks, Morganlander also likes “large cap value stocks.” “For the first time in the last 18 to 24 months, we’ve increased our exposure to the large cap value group and took the proceeds from growth to increase that exposure,” he added. Value stocks are often cheaper than so-called growth stocks and typically trade at a lower price than what the company’s performance indicates. Stocks to play Morganlander believes several sectors and stocks make good plays for investors right now. His asset management house’s tactical portfolio strategy for the second quarter “continues to favor domestic [U.S.-listed] stocks over bonds and international equities,” according to a recent 2Q24 outlook report. Among the names on Morganlander’s radar is Union Pacific , a rail transportation company. “We think that the valuation for Union Pacific is quite cheap at a [price-to-earnings] multiple of 15 times which retails for 25,” Morganlander said, explaining why he likes the stock. From the health-care sector, the portfolio manager is also bullish on United Health , as he says its PE multiple of around 17 times gives it “competitive positioning.” It’s “quite attractive,” he added. A PE ratio is an important metric traders use to gauge value, and is defined as a stock price divided by its net income per share. Morganlander also likes tech giant Microsoft . However, he noted that he is avoiding and “trimming” back on some Big Tech names as well as companies in the oil and gas sector, which he believes are “vulnerable” to what he sees as a global deceleration set to continue into 2025.
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