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Large vs. Small Caps—What to Buy: Stock Pickers

The Russell 2000 small-cap index hit its all-time highs last week, but the Dow will continue to be the market leader, according to Jordan Posner, managing director and senior portfolio manager at Matrix Asset Advisors.

“The run that the Russell 2000 had since the market low in March 2009 is about 150 percent and the Dow stocks are up 95 percent, so the Dow stocks have lagged,” Posner told CNBC.

“Within the Dow itself, there are a number of stocks that have underperformed and that’s where we focus, in terms of placing money in large-cap stocks.”

In the meantime, Bill McVail, portfolio manager of the Turner Small Cap Growth Fund, said small caps will continue to benefit from the ongoing M&A.

“There’s been a dearth of new deals over the past 3 or 4 years [and now] people are looking to grow their companies, they have strong balance sheets and are buying small-cap companies. And that’s one of the things that’s driving the markets and it’s what will continue to drive the markets in 2011.”

Posner’s Picks:

Bank of America

Cisco

Procter & Gamble

McVail’s Picks:

Tempur-Pedic

Wesco Intl.

Concur Tech.

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Scorecard—What They Said:

  • McVail's Previous Appearance on CNBC (Dec. 8, 2010)
  • Posner's Previous Appearance on CNBC (Feb. 2, 2011)

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More Market Intelligence:

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CNBC Data Pages:

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CNBC Slideshows—FYI:

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Disclosures:

McVail owns shares of TPX, WCC and CNQR in the Turner Small Cap Growth Fund (TSCEX).

Turner Investment Partners owns more than 1 percent of TPX, WCC and CNQR.

No immediate information was available for Posner or his firm.

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Disclaimer

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BAC
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CNQR
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CSCO
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PG
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TPX
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WCC
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