In October last year, Laszlo Birinyi, president of Birinyi Associates, cut back on his exposure to the energy sector, selling off energy ETFs and Exxon Mobil — and the stock is down about 2 percent since then. Heading into the new year, Birinyi shared his top five picks for 2011 with CNBC.
Birinyi said we are in the middle of a bull market, but maintains his focus on individual stocks, as opposed to pinpointing general industries.
"I'm not bullish on anything [broad]. I'm bullish on individual stocks," Birinyi said.
"I think the story this year has been to try to go from the bottom up — not try to get themes, not try to get big ideas. Look at indivdual names on an individual basis."
Birinyi's Top Five for 2011
5. Cummins — Already up more than 130 percent this year, Birinyi said this maker of diesel and natural gas engines is positioned in the "sweet spot" of the economy, with momentum from seven consecutive quarters of strong earnings.
4. BP Prudhoe Bay — While Birinyi said he is "not really excited about energy as a whole," Prudhoe Bay plays on the yield story, consistently over 7 percent.
3. Polo Ralph Lauren — With a new shop on Madison Avenue in Manhattan, Birinyi said this high-end retailer is "doing well at Christmas time," tapping the luxury consumer.
2. Priceline.com — Birinyi recommends this online travel company for traders, offering a premium in its options as it continues to "blow out earnings quarter after quarter."
1. Hermes International — Birinyi calls it the "most unloved stock in the world" with 20 of its 22 analysts tagging a sell rating on the shares. The family-run luxury brand is currently in the middle of some legal issues, but presents, Birinyi says, "a win-win situation if the family puts up a strong defense."
Scorecard—What They Said:
- Birinyi's Previous Appearance on CNBC (March 23, 2010)
More Market Analysis & Opinion:
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- Citi a Value Play — Here's My Price Target: Kotowski
- Consumers Will Drive Markets in 2011: Strategist
CNBC Data Pages:
No immediate information was available for Birinyi or his company.