Even when picking stocks, cash is king, according to Wouter Weijand from Fortis Investments, who likes US funeral service company Hillenbrand, Swiss healthcare manufacturer Novartis, and Australia’s ANZ Bank.
Hillenbrand is the leading funeral service and casket provider in the US. "
They have a very strong balance sheet, a rising dividend yield that is currently at 4.4%," Weijand told CNBC.
"They should be trading around $26 a share, however they are under $17. It is true that there is competition, but they are the biggest. They are well established and are a very 'steady eddy' stock," he added.
Novartis is trading at around a 10-year low and, in Wiejand's opinion, the Swiss company which researches, develops and manufactures healthcare products "is way too cheap."
"This company is trading at 9 times 2009 earnings, and 8.5 times 2010 earnings. It has not rebounded sharply yet, unlike some of its competitors, and it is one of the most diversifies European pharmaceutical companies," he said.
"There is the fear about Obama's administration interfering with their pricing and generics, but they do have their own generic exposure," said Weijand, adding that Novartis has a large amount of net cash, “a very strong balance sheet" and 4.75% dividend yield.
Weijand's Asian-Pacific stock of choice is ANZ Bank.
"The company did quite well and their earnings grew quite a lot last year," he said.
The risks of the company lie in the writeoffs they have to make, however Weijand likes the transparency of the company's CEO.
"They were the first to take the risk, and had the courage to say 'we just cut the dividend by 25 percent, save 500 million Australian dollars a year, this way we can proactively manage our balance sheet. We keep our tier 1 ratio above 8 percent, and are therefore running a decent balance sheet,'" said Weijand.
"They are a in a better position than some of their peers, and we think they are in an attractive spot to move back into them," he concluded.
Weijand also provides some feedback on how to create income when approaching retirement.
Disclosure: Wouter Weijand and Fortis Investments have no holdings in any of the companies mentioned above.
