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.
Hudson City Bancorp
People’s United Financial
Scorecard—What They Said:
- Lancz's Previous Appearance on CNBC (Oct. 11, 2010)
- Morgan's Previous Appearance on CNBC (Nov. 9, 2010)
More Market Analysis & Advice:
- 9 Multinational Picks For Your Portfolio
- Stocks Are 'Good Long-Term Investment': Strategist
- If S&P Holds This Level, Stocks Will Rally: Pro
CNBC Data Pages:
No immediate information was available for Morgan or his firm.
Lancz owns shares of HCBK, PBCT, HRB and JOE for himself, clients and family.