Beyond 13,000: Analysts See Higher Levels Ahead for Dow

Rod Kiddoo, chief investment officer at Cozad Asset Management, told CNBC’s “Power Lunch” that he believes the Dow crossing 13,000 signals higher levels ahead.

“In general, we believe the market is still undervalued based on current P/E ratios, interest rates, the spread between dividend yields and interest rates,” Kiddoo said Wednesday. “We feel there is still some move to the upside available for investors.”

He said the current turmoil in the sub-prime mortgage sector has been overblown because the key issue is employment, which remains strong.

“I’m old enough to have lived through the savings and loan debacle of the early 1980s and interest rates at 15%,” Kiddoo said. “The economy continued to hum along well, and following 1982, we have the best bull run we’ve ever had in the stock market which followed a serious housing (downturn). (The current) housing situation isn’t anything like that. We’ve had a downturn following the greatest boom in housing, and I think it’s a little oversold in how it affects the market.”

John Burns, founder of Burns Advisory Group, said the market’s rise reflects more than just major companies with strong international sales benefiting from the weak dollar.

“We see very reasonable valuations just from a few years ago,” Burns said. “GDP is 35% to 40% higher than it was at the beginning of the decade and valuations just look fabulous. There is a bright future for investors.”