Delaware Investments' Lori Wachs looks to "the Holy Grail of the consumer" and a "magic logo" to pick investments. The top fund manager joined "Morning Call" to share her insights -- and favorite retail stocks -- with viewers.
Wachs manages the Delaware American Services Fund, rated four stars by Morningstar for its 10.8% returns over the past five years and 12.1% returns year-to-date.
The fund manager told CNBC's Mark Haines that Under Armour has a "magic logo." Wachs concedes that shares of the sports equipment and performance-apparel maker will "never be cheap on a P/E basis" -- but it's currently "at one of the cheapest levels" since going public.
Now is a good time to get in on the ground floor of the company: It is just beginning to "scratch the surface" of its womens' line, preparing to offer footware in 2008 and build up its international profile, Wachs said.
Wachs praised accessory-maker Coach for its "top operating margins," predicting "accelerating" earnings and growth rates for the next few years. She said the firm's pricey handbags are "aspirational," as people "trade up" to them. And Coach's "Far East presence is growing."
Lastly, the portfolio manager named Nordstrom as "the Holy Grail of the consumer." She said the posh department-store chain continues to stand out "from the pack," thanks to a "greater access to higher-end brands." Wachs said the company is increasing its total square footage of store space, and "at 16 times [earnings], we think it's a bargain."