Saira Malik, whose stock picks for CNBC PRO's "Platinum Portfolio" competition are up more than 20 percent this year, chose two new names she believes are poised to outperform in the second half of 2016.
"Investors will continue to be easily spooked due to macro/ political drama so we are focusing on high quality companies with identifiable catalysts and strong free cash flow," wrote Malik in an email to CNBC PRO.
The ongoing volatility in the market should lead investors to adopt a more "defensive" stance in the second half, said Malik, who is head of global equity portfolio management at TIAA Global Asset Management, a firm with more than $860 billion in assets under management.
She stresses that despite macro headwinds, equities remain the "most attractive asset class" due to a low interest rate environment, low inflation and positive GDP growth, along with all the stimulus measures by central banks around the globe.
In her own words, Malik shares her investment strategy for the months ahead.
1. Removing Avago and replacing it with MGM Grand
- Avago is still perceived as an "Apple play" and we don't expect investor perception of Apple to improve until 2017
- MGM has identifiable catalysts in 2H 2016
- Opening a new casino in Maryland
- Focus on cost cutting which is running ahead of schedule
- Las Vegas is improving
2. Removing Owens Corning and replacing it with Raytheon
- Removing cyclical exposure with OC
- Raytheon is a great way to play defense in a volatile market
- New CEO (2014) focused on R&D investments which are paying off
- Strongest pipeline we have seen in 5 years
- Q1 2016 revenue growth was fastest we have seen since 2007
- Focus on franchise awards with long term value stream
3. Sticking with Albemarle due to strong position as a global player in industries with few competitors
- Lithium business remains strong
- Sold Chemetal business
- Proceeds will be used to pay down debt & make core acquisitions
4. Sticking with Molson Coors
- Purchase of remaining piece of Miller Coors should occur in 2H
- Synergies should be greater than expected
- Revenue growth opportunities from expanding Miller brand globally
