3 Recovery Picks To Get On Your Radar, Pronto!

If this recession is a long black tunnel, we may be nearing that elusive ray of light!

According to the IMF, the global economy is beginning to recover, albeit sluggishly from the worst recession we’ve seen since World War II and next year global economic growth could be as high as 2.5%!

They go on to say financial conditions have improved faster than the IMF expected when it made its previous global forecast in April (which was slightly lower), largely due to government support for banks and other financial companies.

And much of the global recovery will be driven by emerging economies such as China and India, the IMF says. China's economy is expected to grow by 8.5% in 2010 while India should see 6.5%.

If we are staring to turn a corner, how should you trade?

We asked Eugene Profit of Profit Investments, a four-star fund manager. He suggests looking at companies that are already executing in this environment but stand to do even better when the economy turns. Following are his favorite plays:

Profit’s Picks

UPS
Visa
Blue Nile

Profit says UPS should be on your radar as an early-cycle play because it has a strong balance sheet, now. Also, “it has 20% better yield on package delivery than rival FedEx and it’s now at a price point where you can buy it.”

He likes Visa for its long-term growth prospects due to growing e-commerce. “We bough Visa on Wednesday around $59. We think it has about a $70 price target.”

Profit also suggests Blue Nile simply because it’s becoming the go to place for diamonds. “They had 6% revenue growth year-over-year even in this environment.” And no matter what the economy does “people will still get engaged and still get married.”

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Trader disclosure: On July 8th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour Owns (AA), (AAPL), (BAC), (BX), (EEM), (FXI), (F), (INFY), (SBUX); Seymour's Firm Owns (FCX); Terranova Owns (MSFT), (XBI), (ABT), (OIH), (RIMM), (SUN) ; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Finerman Owns (RIG), (TBT); Finerman's Firm Owns (FCN), (MSFT), (NOK), (PBR), (RIG), (TBT), (WMT), (FLS); Finerman's Firm Owns (BAC) Preferred; Finerman Owns (BAC) Preferred; Finerman's Firm Is Short (BAC), (IYR), (IJR), (MDY), (SPY), (USO)

For Eugene Profit:

Profit Fund (PVALX) Holds (V)
Profit Fund (PVALX) Holds (UPS)