Buy BT, Solvay, SAP on Dips: Investment Pro
Investors should buy dips in solid corporate stocks with strong balance sheets rather than look for value in the volatile banking, sector for which the outlook remains very uncertain, Chris Tinker, co-founder of Libra Investment Services, told CNBC on Monday.
“We’ve seen a lot of hedging going on between bond markets and equities where equities have been sold down as a hedge for bonds,” Tinker said. “The minute you get the relief as we saw last week on some form of resolution, equities can rally very strongly.”
Tinker identified BT , Belgian chemical company Solvay and SAP as value opportunities.
Solvay reports its last set of earnings this week before its acquisition of French rival Rhodia, announced earlier this year, is worked into analysts’ numbers.
“Analysts will then start focusing on the positive upside of that merger,” Tinker said.
Tinker also singled out SAP, which reports on Wednesday, and BT as stocks to buy on a dip.
"Technology is really doing very well for a lot of the companies reporting this earnings season and it's a reminder that you don't have to try and double guess where the knife is going to fall next in the financial system — and in other words the banking sector — when there's some really good solid corporate stories out there," he said.
“Companies that have got a strong balance sheet haven’t got that debt overhang ... If they miss slightly on earnings, you can still pick up on a dip,” he said.
Disclosure: Chris Tinker and Libra Investment Services do not hold shares in BT, Solvay and SAP