Riding the Rally: Small Caps, Booze and Turnarounds

The market soared more than 250 points Monday morning, and CNBC asked the experts how investors can best ride this rally.

Small Cap Opportunities

“Anything that’s smaller in capitalization should be doing better right now as market sentiment gets better. It’s a natural order of events in the markets.”

Bill McVail, Turner Small Cap Growth Fund Portfolio Manager

McVail recommends: Gamestop and Guess

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Bullish on Booze Stocks

“Diageo is a behemoth in the spirits industry. They have eight of the world’s top 20 brands, they absolutely dominate distribution in the United States, they’ve left their competitors in the dust with inroads into emerging markets – particularly Russia, China, parts of Africa. We think the stock is worth $112, trading at a pretty big discount right now.”

Ann Gilpin, Morningstar Beverage Equity Analyst

Gilpin also recommends: Anheuser Busch , Molson Coors and Brown Forman
(Contd.)

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Turnaround Targets

“One I do like a lot is RadioShack …the stock’s been cut in half, now you’re only paying nine times earnings for this company. Their stock is down 50%, their earnings for 2008 looking at $1.62, they returned 33% of their equity, and they have a current ratio of 2.1.”

Brent Wilsey, Wilsey Asset Management