Ron Kiddoo, chief investment officer for Cozad Asset Management, told CNBC’s “Squawk on the Street” that he expects the market to gain more than 10% this year.
“I think we’re in the perfect storm,” Kiddoo said Friday. “We have good employment, stable interest rates, and a growing worldwide economy. It seems like everything is moving in the right direction. The first of the year, I said I thought we’d have 10% improvement in the market. Now, I think it should be even better than that. We’re already at 7% to 8% so I believe we’ll be close to where we were last year at around 15% for the S&P.”
He likes Starbucks, Wal-Mart, and BHP Billiton, a producer of coal, iron ore, oil and natural gas.
Kiddoo said he liked Starbucks because the stock is off 22%. He added, recent weak sales will create easier same-store sales growth in the future.
“Our idea of long-term is one to three years,” Kiddoo said. “It’s not one you’ve got to rush in and buy, but over the next one to three years, I think Starbucks will perform very well.”
He said Wal-Mart’s stock has traded in a narrow range, but expects the company to post strong sales growth in the future.
“We think it’s going to bust out of this trading range,” Kiddoo said. “Wal-Mart has done this in the past where it has sat in a trading range for a few years and then busted out. It is still the nation’s No. 1 retailer.”
BHP Billiton also produces aluminum, base metals, diamonds, stainless steel and manganese, key materials in the booming Asian economy.
“It’s also reasonably valued – about a 12 to 13 P/E with growth and earnings much higher than that,” Kiddoo said.