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Banks vs. Health Care—What to Buy Now: Stock Pickers

Health care and financials are sectors that will likely see a comeback, said Alan Lancz, president of Alan B. Lancz and Associates, and Rob Morgan, chief investment strategist at Fulcrum Securities. They shared their best plays.

The Case for Health Care:

“Through the end of October, health care was the worst performing sector on the S&P 500and it’s because of concerns over Obama-care,” Morgan told CNBC.

“But if you look into 2011, this is a sector that’s going to grow earnings at 12.5 percent even with Obama-care.”

“It’s very cheap," he said of the sector, "And Republicans have made dismantling Obama-care a top priority."

In addition, Morgan said health care stocks including Bristol-Myers , Pfizer and Merck have good 4 to 5 percent yields.

Why Financials Will Rise:

“Two years ago, we got back into financials after warning about them prior to the financial crisis,” said Lancz. “We were buying JPMorgan and Goldman Sachs under book value."

"Now, I think you can buy People’s United and Hudson City—both trading under book value and yields under 5 percent," he explained.

Lancz Likes:

Hudson City Bancorp

People’s United Financial

H&R Block

St. Joe’s

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Scorecard—What They Said:

  • Lancz's Previous Appearance on CNBC (Oct. 11, 2010)
  • Morgan's Previous Appearance on CNBC (Nov. 9, 2010)

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More Market Analysis & Advice:

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CNBC Data Pages:

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CNBC Slideshows:

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Disclosures:

No immediate information was available for Morgan or his firm.

Lancz owns shares of HCBK, PBCT, HRB and JOE for himself, clients and family.

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Disclaimer

Symbol
Price
 
Change
%Change
BMY
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GS
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HCBK
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HRB
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JOE
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JPM MLP ETN
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MRK
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PBCT
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PFE
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