Starbucks stock retreated in heavy volume after a report suggested the coffee chain's growth may be losing some steam.» Read More
David Sowerby is seeing more and more evidence that the market bottomed out two months ago; the latest evidence, he says, was the government's report that April consumer prices went up less than expected.
Sowerby is in a buying mood, but what is he talking about buying...and not buying?
"The one caution still is, I want to see more traction take place in these 'subprime infected' stocks that have not been keeping pace in the rally," he told CNBC.
(See below for Web-Exclusive picks)
Sowerby likes Interactive Data.
"This is the pricing service for pricing things such as mortgage securities," he said. "As we seek more independent pricing in some of this toxic debt...I think you're going to see more need for somebody like Interactive Data, which is generating a tremendous amount of free cash flow yield."
He also likes Deere, with Deere's latest quarterly report sending shares plunging to bargain levels.
His other picks include MasterCard, and Rollins.
CNBC.com Web Exclusive:
(Not on TV!)
Sowerby also likes Cisco and Alberto Culver.
It's being called a major secular trend that will influence the financial markets for most of the next two decades. The estimated 76 million members of the Baby Boom generation will reach the age of 65 by 2029.
It will produce a rapidly-growing market for investments with higher long-term returns, less volatility and the security of dividends as attention turns from earned income to unearned income.
Joe Keating is RBC Bank's CIO of private asset management. He has some recommendations for the Baby Boomers.
So, where do things look rosiest for the graying generation? Keating has identified four sectors where market pressures have opened up great buying opportunities:
(See below for Web Exclusives)
1) International Growth/Dollar Plays:
United Technologies, Rockwell International, Honeywell, Nike
, PepsiCo, Procter & Gamble, Colgate Palmolive , and VF Corporation
2) Pipeline Companies in Master Limited Partnerships:
Ron Baron likes casinos and fancy clothes.
The chairman and chief executive of Baron Capital joined CNBC's "Billionaire Summit" -- a select group of the world's most successful businesspeople -- to offer his investment outlook.
Baron's favorites: a big-name gaming stock and a posh apparel firm.
The CEO's first pick: Wynn Resorts
"I like Steve Wynn. I like the opportunities he has for his business in Las Vegas, and I like opportunities he has in Macao and other jurisdictions which he hasn't yet announced."
Next up: Polo Ralph Lauren
"There're opportunities [designer/businessman Ralph Lauren] has in Europe to be as big as he is in America; in Asia, where he's just getting started; in Japan, that's a big opportunity for him; in accessories, which is an area he hasn't been in before; an opportunity to increase his profit margins in his stores significantly."
Five-star fund manager Kent Croft says investors can pump some profits into their portfolio through the power of natural gas. His Croft Value Fund is up an average of 16.97 percent over the last three years.
"Natural gas still sells at a very significant discount to oil," he told CNBC.
"We think there will be some narrowing of that; also, there's a lot of new gas-fired generation capacity that's going to be coming on, and, frankly, we've been spinning our wheels as far as production goes over the last 15 years."
His first pick is Southwestern Energy.
"They're in the Fayetteville shale play, which is one of the largest, most prolific gas plays in the country," he said. "They're the largest operator there, and they're low-cost...increasing production, and long-lived reserves, so we think they have a way to go."
Croft also likes Williams Companies.
"Williams Companies is actually a little more diversified, a little less risk, because they have a vast amount of pipelines in the country," he said. "They also have, in a very prolific area of the Rockies, increasing production."
Wall Street may have its doubters, but don't count Ted Parrish among them. The co-portfolio manager of the Henssler Equity Fund sees a bright horizon, and he's not reluctant to say so.
"It's not looking that bad," Parrish told CNBC. "The GDP report for the first quarter, we bought some time with that report to let this whole financial mess work itself out. The Fed's throwing a lot of money into the system, which should help, and is actually showing some progress; credit spreads are better; corporate issuance of debt is up, and we're even seeing some activity in the real estate debt markets."
Parrish thinks that after a rough second quarter, corporate earnings will be looking better, led by the consumer discretionary space.
So what looks good in that consumer discretionary space? Parrish likes Garmin, maker of the popular satellite-navigation devices.
"The stock's been beaten up a whole lot," he said. "We think it's still going to grow at between 15 and 20 percent a year, to sell at ten times earnings. It's a great franchise."
Garmin competes against privately-held firms TomTom and Magellan Navigation.
Parrish's fund has a position in Garmin.
Coal is the one energy resource of which the United States has more than enough. So how do you play it? Coal analyst Paul Forward of Stifel Nicolaus is the person to ask.
First, why is the coal market booming?
"We're selling more overseas," Forward told CNBC. "The emerging markets are finding that it's easier to build power plants than it is to get access to coal, and the U.S. is recapturing some long-lost market share...that tightens up those eastern U.S. coal markets."
Ramping up production, however, is easier said than done.
"There's definitely more coal to be had," he said. "We've got about a 250-year supply in the ground, but so far in the eastern states, total eastern U.S. coal production is flat, year-to-date."
Among coal-company stocks, Forward likes Peabody Energy.
"Peabody's the world's largest publicly-traded coal company," he said. "It's not in the eastern U.S., where we've seen [coal prices] move up, but one reason I like them a lot is that they're the biggest in the places that I think the utilities are going to turn to...the Illinois Basin...Wyoming...the growth areas in coal for the next three to five years."
These stocks are well-known, they're earning money, they're reasonably priced -- and David Scott thinks investors ought to own them.
Scott's four-star Chase Growth Fund is up an average of 11.5 percent per year over the last five years.
His first pick is Aflac.
"There are very few financial stocks that we think are attractive," he told CNBC. "Most of them are tainted by lending problems...but Aflac is not; 70 percent of their business is in Japan; in the supplemental insurance area, they've reported a very nice earnings pattern in recent quarters."
He also likes Wal-Mart.
"Wal-Mart has finally got its act together," he said. "The last three or four same-store sales reports have been positive; the last earnings report was very positive; they're going to report earnings later this week, and we expect they'll beat the estimate."
Wal-Mart has benefited from consumers "trading down" during the economic slump, but he thinks the company will be well positioned to thrive during recovery, too.
Web Extra -- Bonus Picks For CNBC.com:
Scott also offered stock recommendations exclusively for this Web site's readers. He recommends IBM and McDonald's.
Doug MacKay thinks he's spotted some stocks that can lift an investor's portfolio in the midst of recession and slow recovery.
"Companies that can, through innovation, drive superior sales growth in spite of the economy," is the succinct description offered by the president and chief investment officer of Broadleaf Partners. "I think that's going to be a strong theme as we go forward."
MacKay recommends "former high flyers" that are currently trading well off their 52-week highs, but his first choice, Research In Motion, doesn't fit into that category.
However, "I would put Apple in that category," he said. "I would also put companies like Intuitive Surgical [there]."
When will gasoline prices be coming down? Never, says Benjamin Halliburton, and he's got some ideas about how investors should play that projection.
The chief investment officer of Tradition Capital Management says what we've been seeing is the long-overdue emergence of oil prices from depression levels, in a market where consumers have become addicted to unreasonably cheap energy.
"In perspective to other consumer goods, [$4.00 for a gallon of gasoline] is really not that much," he told CNBC. "In a year or two, gasoline prices will be higher than $4.00 a gallon."
He describes the energy sector as "a long-term outperformer."
"Our favorite names are actually in the refining sector," he went on. "We like Marathon and we like ConocoPhillips."
Halliburton likes the refiners because of their "compressed margins" and subsequent low stock prices.
"The market has recognized that refining margins have collapsed in the face of higher crude prices, because refiners were unable to pass through those [higher oil] prices," he explained. "That will expand out in '08 and into '09, and you'll see an improvement in refining margins."
The relentless upward march of oil prices dominated the business headlines through the week, but there were other developments, like the collapse of Microsoft's bid to take over Yahoo and Wal-Mart's upbeat sales that also helped spice up the week and keep the markets active. Here are some of the week's highlights:
Monday, May 5
Dave Rovelli, Canaccord Adams: "Don't be scared by profit-taking;" Itron and Research In Motion
Jason Trennert, Strategas Partners: "If you're thinking about M&A, I think this is theyear to do it."
anDisk and CommScope
Ryan Jacob, Jacob Internet Fund: Wait and see on Yahoo; buy Earthlink Martin Pyykkonen, Global Crown Capital: Buy online advertising companies, Googleand Valueclick
Tuesday, May 6
Economist Martin Feldstein tells CNBC falling housing prices and negative equity could push the economy into recession.
Jay Bowen, Bowen Hanes & Co. Go global; companies without global exposure have not been doing well. Caterpillar, DuPont, Parker Hannifin, BASF , ABB
Craig Moffett, Sanford C. Bernstein: Foreign telecoms and US telecoms with foreign exposure: AT&T, Vodafone, Telefonica
Paul Justice, Morningstar: Buy power-generating companies: Constellation Energy Group , Public Service Enterprise Group,NStar
Paul Fremont, Jefferies & Co.: Also likes power generating: Dynegy , NRG Energy , Allegheny Energy
Wednesday, May 7
Doug Cliggott, Dover Management: Buy nuclear power as fossil-fuel prices go crazy: Exelon,Dominion ,Entergy
Walter Price, Allianz RCM Technology Fund: Alternative energy offers opportunities: First Solar, MEMC Electronic Materials
Haim Israel, Merrill Lynch Israel: Israeli companies you may never have heard of: Cellcom ,Partner Communications,Israel Chemicals
Thursday, May 8
Friday, May 9
Keith Wirtz, Fifth Third Asset Management: Buy companies with the most foreign exposure in their industries.Emerson Electric