Kevin Divney, chief investment officer and portfolio manager for Putnam New Opportunities Fund, told CNBC’s “Squawk on the Street” that he believes there will be some second-quarter earnings surprises.
“I think management has been much more cautious over the last three years,” Divney said Monday. “…I think in technology, [forecasts will] be a little under, but in consumer, they’ve been bearish and that could be right.”
Overall, earnings grew about 10% in the first quarter, and the second quarter estimate is for earnings to grow about 7%.
Year-to-date, the Dow Jones Industrial Average has gained 7.59%; the S&P 500 has gained 6%; Nasdaq has gained 7.78% and the Russell 2000 is 5.85%.
Divney said he likes National Oilwell Varco because the long-term outlook is solid for equipment used in exploration and development of energy.
He also likes Nike, because it’s a strong brand and the company has the ability to increase cash flows by cutting manufacturing costs.