US Markets, Economy to 'Grind Higher': Stock Picker

Stocks fell modestly Friday following a disappointingly small gain in nonfarm payrolls for November. How should investors be positioned? Joe Gordon, founder and managing partner of Gordon Asset Management, and Benny Lorenzo, chairman and chief executive of Kauffman Brothers, shared their best plays.

“The [jobs] numbers were disappointing this morning, but you’re going to have these fits and starts in a slow recovery like we’re having, and I feel that we’re going to continue to grind higher,” Lorenzo told CNBC.

“Compared to where we were in January of last year, now we’re generating jobs.”


Lorenzo Likes:

Activision Blizzard—"They have a good product rollout with Call of Duty...and there are others coming," said Lorenzo. "And there’s a shift in their selling to the online and digital media, which is a lot more profitable."

"The stock should be north of $15 or $16," he said.

First Solar


Gordon Likes:

Vodafone—"All the bad news seems to be priced in," said Gordon. "They’ve got $10 billion of free cash flow with 4 percent dividend, low P/E of 7 to 8. So we really like them."

Deckers—"They have a 20 percent compounded annual growth and they’re going to have a record sale of Uggs this year," he said of the firm. "The stock’s probably headed toward $100 at 20 times P/E."

Scorecard—What They Said:

  • Gordon's Previous Appearance on CNBC (Sept. 30, 2010)
  • Lorenzo's Previous Appearance on CNBC (Dec. 1, 2010)

More Market Analysis:

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No immediate information was available for Gordon or Lorenzo.