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Jun.14

8:45 AM ET

Saturday, 14 Jun 2008

The Week: Pickers Think Big, Global, High-Quality

Posted By:Andrew Fisher

Topics:Nasdaq | NYSE | Stock Market | Stock Options | Stock Picks

The week began with a flashback to the credit crisis. It ended with figures showing the fastest inflation in six months and the lowest consumer-sentiment reading in 28 years. Along the way, as the stock market ebbed and flowed, CNBC guests assembled a collective portfolio that was heavy on technology, energy, and global exposure.

Monday:

Lehman Brothers [LEH Loading... () ] warned of an unusually large $2.8 billion quarterly loss, and pledged to raise $6 billion in new capital. April pending-home sales, a leading economic indicator, rose 6.3 percent.

David Sowerby of Loomis Sayles recommended technology stocks, with their abundance of free cash flow: Applied Materials [AMAT Loading... () ], Corning [GLW Loading... () ], Harris Corporation [HRS Loading... () ]. He also liked trendy watchmaker Fossil[FOSL Loading... () ] and beverage producer Dr. Pepper Snapple [DPS Loading... () ].

Stifel Nicolaus's Todd Weller went with information technology: Eclipsys [ECLP Loading... () ], Allscripts [MDRX Loading... () ], Quality Systems [QSII Loading... () ], Cerner [CERN Loading... () ].

Gary Anderson of the UMB Scout International Fund pointed overseas to Novo Nordisk [NVO Loading... () ], United Overseas Bank [UOVEY Loading... () ], and Petrobras [PBR Loading... () ].

Tuesday:

The trade gap widened more than expected. Fed chairman Ben Bernanke warned that oil prices are driving inflation. XTO [XTO Loading... () ] announced it was buying privately-owned Hunt Petroleum.

Phil Orlando of Federated Investors recommended not oil companies, but oil exploration and equipment firms: Transocean [RIG Loading... () ] and Schlumberger [SLB Loading... () ].

David Riedel of the Riedel Research Group suggested Deere [DE Loading... () ], which is providing the world's farmers with technology to gain desperately-needed efficiency in food production.

The Jensen Portfolio's Robert Zagunis told investors to go with companies that are big, global, and high-quality: Automatic Data Processing [ADP Loading... () ], Johnson & Johnson [JNJ Loading... () ], and Wells Fargo [WFC Loading... () ].

Paul Fremont of Jefferies and Credit Suisse's Dan Eggers recommended non-regulated utility companies. Fremont picked First Energy [FE Loading... () ], NRG [NRG Loading... () ], and Dynegy [DYN Loading... () ], while Eggers went with Public Service Enterprise Group [PEG Loading... () ], FPL Group [FPL Loading... () ], and Reliant Energy [RRI Loading... () ].

Wednesday:

Crude oil inventories fell more than expected. The Fed's anecdotal Beige Book pointed to a weak economy, with a soft labor market and consumers hit by rising food and energy prices.

CastleArk Management's Jerry Castellini told investors to stop obsessing over oil prices and buy stocks like Petrohawk [HK Loading... () ], Southwestern Energy [SWN Loading... () ], Ultra Petroleum [UPL Loading... () ], Nabors Drilling [NBR Loading... () ], National Oilwell [NOV Loading... () ], and Rowan Drilling [RDC Loading... () ].

Keith Wirtz of Fifth Third Asset Management recommended a blend of technology and ketchup: IBM [IBM Loading... () ] and H. J. Heinz [HNZ Loading... () ], saying both companies are defensive and are part of unique momentum trends.

Thursday:

First-time jobless claims hit their highest weekly level since late March; Lehman Brothers replaced its chief financial officer and chief operating officer; and Philadelphia Fed president Charles Plosser told CNBC inflation is his chief worry, and rates will have to go up -- the only question, he said, is, "When?"

David Katz of Matrix Asset Advisors suggested a move back into some selected financials: Merrill Lynch [MER Loading... () ] and Morgan Stanley [MS Loading... () ], but Fusion IQ's Barry Ritholtz strongly disagreed, recommending Arch Coal [ACI Loading... () ], Swift Energy [SFY Loading... () ], Oracle [ORCL Loading... () ], Sybase [SY Loading... () ], and BMC Software [BMC Loading... () ].

Matthew Kaufler of Touchstone picked Triquint Semiconductor [TQNT Loading... () ] and Assured Guaranty [AGO Loading... () ], a bond insurer that's kept its AAA rating while some high-profile competitors have been losing theirs.

Friday:

May's consumer price index reading showed the fastest inflation in six months, while June's preliminary consumer sentiment fell to its lowest level in 28 years.

Barry James of James Advantage Funds went with some major U.S. multinationals, three of them the largest companies in their respective fields: McDonald's [MCD Loading... () ], Owens Illinois [OI Loading... () ], Hewlett Packard [HPQ Loading... () ] and Wal-Mart [WMT Loading... () ].

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