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Bill Gross picks... stocks!

Bottles of Budweiser and Miller Lite beer
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Bottles of Budweiser and Miller Lite beer

Bond legend Bill Gross is making big bets… on stocks! Gross, who manages the Janus Global Unconstrained Bond Fund, surprised the crew on CNBC's Power Lunch yesterday when he said he sees big opportunities in these two names:

SABMiller

Gross: "There's an arbitrage situation between Miller and Bush. Bush is paying $44/share, [for Miller], which trades at $42/share. A $1 dividend along the way over the next 6 months, that's a 5-6% return type of vehicle."

PFF

Gross: "This is the iShares US Preferred Stock ETF. It invests in bank preferreds and yields 6%. Volatility is relatively low compared to the stock market. It's a decent investment that the Janus Unconstrained Fund is holding at the moment."