Stock Picker: Energy and Small-Cap

Plunging oil prices have not scared Eric Cinnamond away from energy stocks.

In fact, 17 percent of his equity portfolio is now energy; six months ago, there were no energy stocks in it.

He's also big on small-cap stocks.

"We're finding a lot more valuations that we like," the Intrepid Capital Funds money manager told CNBC. "2007, small caps were very expensive, and it was very hard to find discounts, but right now we're finding quite a few."

Combining the two, he has a couple of small-cap energy stocks to recommend.


"Our largest energy holding at this time is Patterson-UTI (Energy)," he said. "They're the market leader in drilling in the U.S.; on land, they have about 25 percent market share, 350 rigs we believe are being valued far below replacement costs."

Also on his list is another land driller, Unit.

"Everyone loved energy six months ago," he explained. "Some of these are down 60-80 percent, and this is where we're finding a lot of value right now."

Outside of the energy sector, Cinnamond likes Applied Signal Technology.

"Applied Signal is the market leader in intelligence gathering," he said. "They sort through telecommunications signals; this is very vital for the intelligence agencies of the U.S. government. Obviously, there's no credit risk there."


Disclosure information for Eric Cinnamond was not immediately available.