Investors are always on the lookout for a great name to add to their portfolio. But instead of buying stocks when they’re at the top, George Shipp of the BB&T Special Opportunities Fund keeps a special eye out for those “hidden gems” – those stocks that don’t fall into the tech, growth or value stock pigeonholes.
Shipp’s record speaks for itself: his portfolio was up 21% last year and up 16% over the past 3 years. He says BB&T’s Special Opportunities Fund allows for the flexibility to buy large and small cap stocks, and it focuses on uncertainty – those stocks that might be shaky in the short-term, but have great long-term potential. Shipp offered three of his picks on “Morning Call”:
- Checkfree , is an electronic payment processing company. Shipp says this is a “bonafide growth company in a growth market.” It is the engine behind electronic bill payment. And while the application is in its infancy, Shipp expects it to grow as more people start paying their bills online.
- Noble Corp , is an offshore drilling company. Noble has been able to grow 16% over the past two decades and seems to be invincible to oil prices. Shipp notes that Noble’s rate on the rig contracts it signed in the fourth quarter were for two or two-and-a-half year terms – and they doubled the price of the average rate they received that same quarter. In addition, analyst estimates keep going up so Shipp says even if the analysts are “half right” going forward, Noble is still a buy.
- Smithfield Foods , a pork-processing producer. Shipp says he likes this stock because it’s a growth company disguised as a cyclical. Smithfield just completed several acquisitions including Sara Lee and Butterball Turkey. They have another one on the horizon and Shipp expects the stock to rise as a result.
Shipp also offers two more picks--exclusively to CNBC.com:
- Comcast , America’s largest cable and broadband company. Shipp says he likes their business model and he especially has faith in the new services they are rolling out, like HD and VoIP (voice over internet). Comcast also owns one of the “fattest pipelines into the home” which gives them a leg up with broadband and fiber-optic services.
- Nalco Holdings , the leading provider of water chemicals. Treated water is an up-and-coming business for big industrials like GE and 3M and, perhaps more importantly, it’s a steady business. While raw material costs have hurt Nalco, Shipp says the worst is over and Nalco is set to rebound.