Yes, Microsoft and Cisco have underperformed, but they "generate gobs and gobs of cash, and do have a lot of capital allocation flexibility," he said.
Cisco "is trying to do a lot of things to right the ship," Sloan noted. According to recent reports, Cisco could cut as many as 10,000 jobs.
At least one analyst doesn't think the reported job cutting will be enough. Alkesh Shah of Evercore Partners told CNBC Tuesday that while the personnel cuts would help Cisco meet its target of saving $1 billion in operating expenses, the company needs new products to compete. Read more here.
As for Microsoft, "people have been badmouthing this particular Windows 7 cycle for two years and yet they’ve actually done a very good job," he said. They are a beneficiary of cloud computingand have seen slightly better unit personal computer sales, Sloan said.
"So I think they’re kind of the flower child of this kind of thinking," he added.
His other favorites include ABB Ltd. and Illinois Tool Works.
Watch: Ron Sloan discusses what's next for stocks.
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Disclosure information was not available for Ron Sloan or his company.