Portfolio Manager: Stocks Are Undervalued and Can Move Higher

Noah Blackstein, portfolio manager for Dynamic Mutual Funds, told CNBC’s “Squawk on the Street” that he believes stocks are undervalued and the market can go higher.

“I think the market becomes more selective,” Blackstein said Tuesday. “I think the shift in the market goes more toward some of the growth stocks which we’re seeing in the last month or two start to lift from their bottoms. Overall, especially for the growth parts of the market, I’m excited.”

Blackstein said he believed Google is undervalued.

“That was my top pick a month ago,” he said. “I think there’s a lot of room for (Google) to grow. I think the best of Internet advertising still isn’t priced in. You have a free option on a whole host of ancillary services that they’re just beginning to provide. So, I think (the stock) is undervalued.”

He said strong M&A activity has made shorting individual stocks dangerous, especially for the retail investor.

“When you find stocks that may be overvalued or in secular decline, you can walk in one morning to M&A and get hurt very badly,” Blacksein said. “If you’re going to short, stick to the ETFs or sector-specific ETFs and try to stay away from individual stocks…until some of this M&A (activity) dies down.”