Investors should make sure to snap up a few key stocks going into next week, according to Jeffrey Saut, the chief investment strategist at Raymond James, who gave his picks for the coming week and general market outlook on Friday.
Despite the recent negative market reaction to the ever-changing possibility of a QE3 (third round of Fed easing), Saut said he still thinks the market is "bullishly configured unless we break below the 1230, 1250 level" on the S&P.
Saut said he thinks the markets "are in the process of making a bottom" and that stocks will be higher than those levels by the end of the year on the S&P.
Even though the Dow dropped below 12,000 Friday, Saut said he stands behind his previous statement that the market can stay afloat by itself and only a "foolish government strategy would derail" it.
"I do think the economy is self-sustaining," Saut confirmed. "I do think profits are going to continue to come in better than most people think."
Saut said that while he doesn't expect the recent dip in the markets to take a turn for the worse, he is confident that, if it was necessary, "the powers at be would absolutely do a quantitative easing three whether they would call it that or not."
Linn Energy — Saut said the half-oil-half-gas pipeline company is hedged for the next couple years at about 97 percent. "They have a decent divident yield. Management is excellent. They're growing 30 percent organically."
Wal-Mart — "I tend to like things that everybody else hates," Saut said. He likes that Wal-Mart has plans to expand, thinks it will grow its revenue and profit by double and single digits respectively, and thinks the chain is being valued like a grocery store when "50 percent of their revenues come from non-grocery items."
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Saut owns shares of Linn Energy, IberiaBank and Wal-Mart, and Raymond James is a market maker of all three.