Stocks Seen Rising Further In Volatile Fourth Quarter
Two Pharma Stocks
Johnson & Johnson is one stock that looks cheap at current levels, according to Peter Klein, senior portfolio manager at Fifth Third Asset Management.
"We like it because it's a low-expectation, undervalued security at this point," he says. "If you look at what's happened over the past seven years, it's doubled its earnings and its dividend and is selling at the same price a was in 2001. It is certainly undervalued at 14 times earnings."
Another pharmaceutical stock the money manager likes right now is Barr Pharmaceuticals, a company that focuses on the generic drug market.
Klein says the company's recent takeover of European generic drug manufacturer Pliva will help Barr get its foot into the European market, gives it low-cost manufacturing capabilities and opens the door to manufacturing generic biotech drugs.
"I think we're going to see that the opening up of European markets will be a big boon for Barr," Klein says.
Peter Kang is a markets writer for CNBC.com and can be reached at firstname.lastname@example.org.