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Defensive Stocks Too Pricey: Strategist

The premium for defensive stocks appears excessive, making other sectors a better value, UBS Chief Investment Strategist Mike Ryan said Thursday.

"What we see now is the cyclicals trade at about an 11 or 12 percent discount to the defensive," he said. "We think that premium is too high in the defensive, so we'd rather be in the area where we think we get more upside leverage and better valuation."

On CNBC's "Fast Money," Ryan said that the sectors with the most upside were technology, industrials and materials. Sectors to avoid, he added, included telecom, health care and utilities.

While acknowledging that global growth wasn't stellar, citing PMI figures for France and Germany, Ryan noted that growth was positive in China and the United States.

"I think the environment for U.S. equity stocks is still favorable," he said.

Ryan has a year-end target of 1,600 for the S&P 500, with earnings around $110 per share and $117 next year.

The Federal Reserve's monetary policy and asset purchases would continue to buoy stocks for the near future, he added.

"The Fed made it clear that they're not going to go cold turkey and simply shut it off," he said. "What they'll look to do is, based on the conditions, they're going to taper the amount of support they provide in terms of the purchases through QE3."

Trader disclosure: On March 21, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Brian Kelly is long GOLD; Brian Kelly is long SILVER; Brian Kelly is long S&P; Brian Kelly is long TREASURY NOTES ; Brian Kelly is long BUNDS; Brian Kelly is short DAX; Brian Kelly is short CAC; Brian Kelly is short EUROSTOXX; Brian Kelly is short OIL; Brian Kelly is short GASOLINE; Jon Najarian is long SSRI; Jon Najarian is long GSK; Jon Najarian is long NKE CALLS; Jon Najarian is short ORCL Puts; Jon Najarian is short LGF; Jon Najarian is long JNPR; Simon Baker is funds long AAPL; Simon Baker is funds long CSCO; Simon Baker is funds long DE; Simon Baker is funds long F; Simon Baker is funds long GOOG; Simon Baker is funds long MSFT; Simon Baker is funds long QQQ; Simon Baker is funds long XLY; Simon Baker is funds long JNPR; Simon Baker is funds long QCOM.

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