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Stock Picker: Big Corporate Refresh Coming — Buy These 'Mega-Caps'

Markets rebounded after a lower open Friday. How should investors be positioned? David Spika, VP and investment strategist at WHG Funds, and Christian Thwaites, president and CEO of Sentinel Asset Management, shared their insights. (Scroll down for their stock and sector picks.)

“The general direction in the market is going to be listless for quite a while,” Thwaites told CNBC.

“We’re operating in a pretty tough background, and the market’s waiting for how the government and the Fed is going to withdraw, and we’ve got a sovereign debt crisis looming right behind us.”

On an up note, Thwaites said recent earnings reports have been positive, which offers some "mega-cap" buying opportunities for investors.

“The big indicator is exports…and industrial production,” he said. “If you’re in sectors which have good export exposure and good industrial production, that’s a good place to be.”

"There's a big corporate refresh coming," Thwaites added.

In the meantime, Spika sees continuing economic recovery in the U.S. and said this is a chance to invest.

“We’re encouraged by the fact that what has driven the market down is, recently, what’s been going on overseas...it hasn’t been domestic issues," he said.

Speaking on the Federal Reserve move to raise the discount rate, Spika said Thursday's action was expected.

“It’s a step in the process of normalizing the stimulus environment, of reducing liquidity, which is exactly what we expect,” he commented. “What this will do ultimately is reduce liquidity, bring down investor risk appetite and drive capital into higher quality names.”

Recommendations:

Spika Likes:

Industrials

Technology

Thwaites Likes:

United Technologies

Honeywell

Chevron

IBM

Hewlett-Packard

  • For 5 more stock picks from Thwaites, watch video.

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More Investor Insights:

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CNBC Data Pages:

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CNBC Slideshows:

  • Cramer's 12 Stocks to Play the Recovery

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Disclosures:

No immediate information was available for Spika or Thwaites.

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Disclaimer

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