“For the first time in a long time, this is a stock-picking market.”
Quint Tatro
chief investment officer, Joule Financial
Some investors may want to take advantage of the technology’s decline, Delano Saporu, CEO and chief advisor at New Street Advisors Group, told CNBC’s “Trading Nation” Wednesday.
If interest rates continue to rise despite the Fed’s relatively subdued stance, technology stocks will “come under pressure in the near term as the market tries to figure out what’s next,” Saporu said. “Long term, I think so.”
His top picks in the group were Microsoft and Apple, the two biggest weightings in the S&P tech sector.
“In the long run, we will be in a good position,” he said. “So if you’re a long-term investor, this is an opportunity to come in at lower valuations, and I think in the long run we will see technical stakes rise higher.”
Saporu also looked at stocks that “could get the wind in pent-up demand” – he mentioned the airline Delta and United Airlines in an earlier email to CNBC – and the video game and virtual reality industry.
“I want to see … what happens to maybe playing with cryptocurrency” and intangible tokens, the digital collectibles commonly known as NFTs as video games and virtual reality companies try to fold these into their strategies, said Saporu.
This market environment has become particularly good for stock selection, said Quint Tatro, Joule Financial’s chief investment officer, in the same “Trading Nation” interview.
“For the first time in a long time, this is a market for stock voters,” he said, adding that while Big Tech could remain under pressure if interest rates rise, “there is an incredible opportunity to locate other sectors and stocks.”
“We would actually be sellers of Apple and Microsoft,” Tatro said. “Those… we still see as stay-at-home, and we would be a buyer of Facebook specifically, but also Google as some sort of reopening game and a game on advertising, as small businesses really want to regenerate that growth and really build inventory. those shop windows. “
While Facebook and Google parent Alphabet are often aligned with technology, they are the two biggest weighers in the S&P communications services industry.
Tatro also envisioned a less conspicuous business.
“I really think investors should look at a little-known industry that we’ve really lost sight of until recently, and that’s the materials,” he said.
Material inventories are up about 6% in the past month and just over 8% to date.
“In particular, I think the industrial metals are very interesting here,” said Tatro. “We really like some of the steel business: Commercial Metals, CMC and Reliance Steel. These are names that are having exceptional upward earnings here in the coming years, especially with … the kind of reflation and the global growth story that’s getting back on track and they have exceptional balance sheets and they sell at fair value. “
Disclosure: New Street Advisors Group, Joule Financial, Delano Saporu and Quint Tatro own shares of Apple and Microsoft. Joule Financial and Quint Tatro own shares of Alphabet, Facebook, Commercial Metals and Reliance Steel.
Disclaimer