How should investors prepare their portfolios if unemployment rises to 13 percent? Brian Kelly, president of Kanundrum Research and Jim Iuorio, director at TJM Institutional Services, shared their stock plays.
CSX —“I would argue that the unemployment rate is already at 13 percent,” Kelly told CNBC. “I don’t think the recession is over. The consumer is not buying anything. So you’ve got to be short the rails and the transports.”
Yum Brands —“China has been a big growth strategy for them—this stock has been up based on the emerging market play and the emerging market growth,” he said.
York Water Company —"The legacy that [the recession] is going to leave behind is a consumer that’s more conservative and is a little more driven by fear,” said Iuorio.
“The rotation goes from things we want to things we need. This company is a vertically integrated company—they own the reservoirs, they own the filtration, they own the way it’s delivered to homes. They’ve had good return on equity, they’ve had good revenue growth and they’ve actually had better profit margins over the last year and half.”
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No immediate information was available for Iuorio or Kelly.