Blue Chips vs. Growth Stocks—What to Buy: Pros
There’s a “lot less risk” and a “lot more reward potential” in the blue-chip stocks, according to Heather Brilliant, vice president of global equity and credit research at MorningStar.
“This latest rally over the last couple of years has been driven by small caps and high growth stocks,” Brilliant told CNBC.
“Over the last year, you’ve got small caps up 20 percent, and small cap growth up over 27 percent, versus the broader market [which is] up more like 14 percent—the large-cap blue chips haven’t participated; they’re up about 12 percent.” (Scroll down to see her full picks.)
The Case For Growth Stocks:
In the meantime, Ron Weiner, president and CEO of RDM Financial Group, said he is in favor of the growth stocks.
“For the short-term, these things can hit a bubble and go down a little, but for the past five years, it’s the emerging markets that are growing—and anybody selling to those people are going to keep growing,” he said.
Broadcom — "They’re down about 14 percent off their highs," Weiner said of the firm. "They’re in everything video and voice and they supply materials for every tablet, not just the Apple tablet."
Cisco Systems — "Even if you’re in a multi-year bear market, you’re talking about a valuation that’s reasonable now," Brilliant said. "All of those concerns are already priced into the stock."
"If they can continue to grow close to double digits in routers and switches, then there’s a lot of potential for the stock to be worth almost double where it’s trading right now."
Scorecard—What He Said:
- Weiner's Previous Appearance on CNBC (Mar. 9, 2011)
More Market Intelligence:
- Bullish Trend to Continue—Buy Metals: Strategist
- Tech Sector 'Still Looks Very Strong': Stock Picker
- What Banks Need to Kick-Start Rally: Strategist
CNBC Data Pages:
Brilliant does not own shares of ABT, CSCO or EXC.
Weiner has clients who own shares of BRCM, CAT and BTU.