Muddled by inconsistent earnings and stock performances, one sector appears tougher and tougher to predict, CNBC's Jim Cramer says.» Read More
John Dorfman's prescription for a portfolio: A pharmaceutical, a defense contractor, a media company, and a technology stock.
He has no illusions about the bull market being back.
"I'm actually looking for a rally around October," the portfolio manager of the Dorfman Value Fund told CNBC. "I think the next couple of months, though, continue to look kind of rough and painful to me."
Topping his list is Pfizer.
"As long as the economy is sputtering, the drug stocks are defensive, and they have lovely dividend yields," he said. "For instance, Pfizer is yielding between 6 and 7 (percent)...these are stocks that have been hammered down, in most cases, five years in a row, and they're selling at multiples like tobacco stocks."
He also likes ceramic armor-maker Ceradyne.
Also on his list is media giant Gannett.
"Yes, newspapers are in a secular decline, they're losing advertising to new media, but, Gannett has a lot more to it than that," he explained. "It has 900 publications in addition to newspapers; it has something like 23 TV stations; it has a lot of internet sites; they have a lot of ways of purveying information, and I just think the stock has been hammered excessively."
Rounding out his selections is technical component maker Ladish.
The Federal Reserve held U.S. interest rates steady on Tuesday. Where does that leave investors?
Frank Holmes of U.S. Global Investors and Michael Cuggino of the Permanent Portfolio Funds offered CNBC their investment ideas.
Stocks mentioned in the interview include U.S. Steel and mining company Freeport-McMoRan.
Conventional wisdom says that if investors use their discretion, they won't have anything to do with consumer discretionary stocks. Jeff Krumpelman begs to differ.
His four-star Fifth Third Lifemodel Fund is up an average of 8 percent per year over the last five years.
"It's one of two unloved areas in the market right now, financials being the other," Krumpelman admitted to CNBC. "It's actually a rich, fertile disparate area, one of the more pleasurable sectors in the market to look at."
Topping his picks in the sector is Borg Warner.
"It's a beneficiary of the secular drive toward global demand for fuel-efficiency and clean-air emissions," he said. "As a result of this need for turbochargers and transmissions that lead to better fuel efficiency, these guys are gaining share, getting more traction with the auto companies, and driving 15 percent earnings growth."
More predictably situated in the consumer-discretionary sector are Carnival and Comcast.
Carnival stands to benefit from falling oil prices, and Comcast recently posted higher second-quarter profits and reported strong sales of its video-phone Internet packages.
U.S. light, sweet crude oil prices -- trading on the Nymex -- could fall toward $100 per barrel in the short term, Nick Batsford of Hobart Capital told CNBC.
In his interview (see video at left), Batsford also commented on the FTSE-100 and the NYSE Composite Index.
Trader Talk with Bob Pisani:
Who benefits from falling oil?
- Delta Air Lines
- Continental Airlines
- UAL (United Airlines)
Neil Hennessy, portfolio manager of the five-star-rated Hennessy Focus 30 Fund, offered CNBC insights -- and stock picks -- to beat a bear market.
"Mundane things can make a lot of money" but are often overlooked in favor of flashy trends, said Hennessy -- and those humdrum investments can also be more trustworthy during a downturn.
He conceded that "some of the speculators are taking their money out of oil" -- but he recommends Oil States International regardless of oil prices. He believes that offshore drilling will become a necessity, and Oil States supplies service products and deep-sea pipes to drillers -- a business the company handles "extremely well."
W.R. Grace: Most people think of its as a construction company, but it's actually a chemical company," he says. It boasts such mundane -- but huge -- businesses as coating food cans. Excited? Consider hennessy's numbers: WR Grace coated "340 billion cans last year."
Lastly, SPX, a diversifed company that makes everything from cooling systems for power plants to food and beverage to diagnostics for autos -- and he notes that SPX has the flexibility to move out of sectors that stagnate, lessening its auto exposure greatly in recent days.
Disclosure information was not immediately available for Hennessy or for his company.
Is there fizz left in the beverage stocks? UBS analyst Kaumil Gajrawala thinks so.
"The reality is, these are fairly recession-proof companies, and they're likely to continue to put up good numbers," he told CNBC. "They've not missed any so far."
"On the Coca-Cola side, this is a company where 80 percent of its business is outside of the United States," he said. "It's benefiting from trends such as urbanization. ...If growth were to slow...a couple of percentage points, it won't have an impact overall."
And Coca-Cola is not alone.
"On the PepsiCo side, this is a food company," he explained. "Arguably, (it's) one of the best-executing food companies in our coverage, and when you look at the benefits of snacking, and the trading up, and you look at commodity costs and concerns, this is a company that's been able to offset, through cost programs, through productivity, through pricing, a lot of that risk and it's continuing to hit (its) numbers."
Coca-Cola is a client of Gajrawala's firm.
Gajrawala and his family own shares of PepsiCo, which has compensated his firm for non-investment banking and non-securities services.
Four-star fund manager Scott Barbee has some counter-intuitive recommendations for adventurous investors. One company is in the oil patch, and the other deals in the always-volatile weapons business.
Barbee's Aegis Value Fund is up an average of 8.29 percent per year over the last five years.
Barbee's top pick is Callon Petroleum, a deep-water Gulf Of Mexico oil driller and producer -- an interesting choice on a day when a tropical storm is raging in the Gulf and oil prices have taken a sudden plunge.
"A lot of funds are selling this because of the oil price dropping," Barbee admitted to CNBC. "We think the market is missing Entrada development that is supposed to come online next year."
Second on his list is Allied Defense.
"(It's) a micro-cap, so investors on CNBC should be careful of this one, because it can be moved around pretty readily," he said. "It trades at less than five times earnings...they make mortar shells, and sell them to foreign governments; it's a great business; backlogs have been building."
There's a small segment of the retail space that's suddenly doing very well, according to Utendahl Capital Partners analyst Daniel O'Sullivan. It's the pawnshop business. He has several recommendations for investors.
Looking for promising investments? Eugene Peroni thinks you'll find them in fields where earnings are growing.
"We still like infrastructure," the senior vice president of Advisors Asset Management told CNBC. "We like the health care group, especially the biotechs and medical and surgical supply."
"I do think that energy has not broken...that energy is still intact for the long term," he added.
In the biotech space, Peroni likes Gilead Sciences and Core Laboratories.
Under an agreement with Merck announced last week, Gilead will distribute a new HIV treatment in 12 countries. Core Labs announced earnings last month that beat Wall Street expectations by 20 cents per share.
In infrastructure, he favors Badger Meter, which makes water meters that automatically transmit usage data using radio frequencies.
That sinking feeling: Kirby Daley, strategist at the Newedge Group, says the U.S. is indeed in recession -- and the market is heading downward.
He tells CNBC that he expects a 15 percent to 20 percent drop in the Dow -- in the near future.
More Gloom & Doom:
Stocks in Monday's news:
- Ford Motor