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Enterprise Tech Companies to Focus On: Portfolio Manager

Wednesday, 11 Nov 2009 | 10:09 AM ET

Markets opened higher on Wednesday as the dollar hit a new 15-month low after the Federal Reserve reinforced the view that rates will remain low for some time. How should investors be positioned? Kevin Rendino, portfolio manager at BlackRock shared his market insights.

“The path of least resistance for the market, because of the calendar, is up,” Rendino told CNBC. “But once we turn the calendar, there’s a lot of issues that plague the market—deficits, taxes, financial regulatory reform … We’re going to have to pay attention to them at some point next year.”

Finding Value in the Rally
The Dow is at its highest level in more than a year, but are there still some value plays left? Kevin Rendino, portfolio manager at BlackRock, says yes. Leon Cooperman, of Omega Advisors, shares his insight.

Rendino said he is “overweight” the technology sector, adding that investors should buy the stocks when everyone thinks they’re cyclical and sell when everyone thinks they’re growth stocks.

“I think in 2010, we’re going to see a shift away from PC improvements, which we’ve seen this year, and more to the enterprise,” he said. “And so we’re focusing on the companies that spend most of their time on enterprise like IBM, Hewlett Packard, and LSI Logic. We got paid for cost cutting, but we haven’t gotten paid at all for potential revenue growth.”

Meanwhile, he said companies such as Apple are “extended.”

“We think we’ve underspent in terms of the wireless [sector] over the last 3 or 4 years and then we’ve had recessionary spending as well, so there’s ways to play the PC and the consumer in different ways other than buying Apple or buying Rimm ," he said. "And those are focused more on PCs and semiconductor names like Maxim, LSI and Analog Devices on the industrial sides.”

CNBC Data Pages:

More Market Intelligence:

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CNBC Slideshows:

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Disclosures:

Rendino and his firm BlackRock own shares of LSI, APPL and HPQ.

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Disclaimer

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TECHNOLOGY
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ADI
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HPQ
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IBM
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LSI
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MXIM
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BB
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AAPL
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