Bulls and bears are debating what the earnings season really indicates, but Robert Doll, vice chairman and CIO of global equities at BlackRock, is siding with the bulls.
“The bull are going to say: the earnings were better than expected by a wide margin and the guidance has been a bunch better and more of it than we saw three months ago. But the bears will say that the comparisons are negative and it’s all about cost cutting and not revenue growth,” Doll told CNBC.
“I tend to think the former story makes sense—we will get some revenue growth as we emerge from this recession.”
Doll said his most recent best-sector play was health care stocks.
“Health care stocks were left in the dust because they were 'too defensive,'" Doll said, adding that investors thought "the health care reform was going to come and strike them all dead [but] those stocks have come roaring back.”
“We still think they’re pretty reasonably valued and think that while we’re going to get health care legislation, it’s not going to be what the sector feared not too many days ago.”
Doll on Technology:
Doll said Microsoft’s recent partnership with Yahoo is “good news,” but the former company needs to do more to rejuvenate its growth.
“Microsoft is not one of the big ones for us,” he said. “We’re concerned about what they’re going to do with their cash, and more importantly, how they’re going to get their earnings going again.”
Instead, he prefers companies such as IBM , Cisco and Hewlett-Packard .
“I like IBM the most,” he said. “We own [Cisco and HP] as well and we think they’re both gaining market share.”
Doll’s firm, BlackRock, owns shares of Cisco and Hewlett-Packard.