Stocks edged lower Friday morning, but Bob Auer, portfolio manager at Auer Growth Fund, said investors should still be bullish on the markets. He shared his outlook, sector recommendation and favorite stock pick.
“I am extremely bullish—I don’t see any problem on the horizon and I think it’s smooth sailing,” Auer told CNBC.
Auer said when interest rates start to rise, money is going to shift out of bonds and safe assets.
“And we haven’t even had money coming into the stock market yet and it’s already up 50 percent off the lows,” he said. “Wait till you see what happens when money comes in and starts chasing this—it could be explosive.”
Auer advised investors to look into the education sector and listed ITT Educational Services as his favorite stock.
“Their customer base has doubled with unemployment,” he said of the sector.
“Some of the stocks have quadrupled after the 2001-2002 recession. So as enrollment is going up 30 to 40 percent, some of these companies are having 50 to 60 percent profit increases.”
- Watch Auer's Previous Appearance on CNBC (Dec. 28, 2009)
More Market Views:
- 20%-30% Correction — then Dow 15,000: Strategist
- Cramer: Can the Market's Move Be Trusted?
- 3 Rising Dividend Stocks for the Next 3-5 Years: Strategist
CNBC Data Pages:
CNBC Slideshows — Education:
ITT Educational Services Competes With:
No immediate information was available for Auer or his firm.