When Stock Picking, Cash Is King: Analysts

Two analysts told CNBC Monday that in Wall Street's current tough environment, investors have to look to large companies for a safe haven, particularly if those companies have a lot of cash on their balance sheets.


Dismal manufacturing data for July released Monday caused the stock market to wipe out gains from an initial relief rally over the debt deal reached among congressional leaders and President Obama.

"I’m a believer that as you get some of these sell-offs you jump into the large-cap names, you’ll be OK," said Warren Meyers, vice president of floor operations at DME Securities and a CNBC market analyst. "But if you look at utilities today, they’re acting better than most any other group. So I think that’s a safe-haven play."

Gold is "still hanging in there and I think there’s still upward momentum," he added.

Michael Shea, managing partner at Direct Access Partners, said in the same interview that he might "wait a day and see how things play out."

On the U.S. debt deal and the effect on the economy there’s "absolutely going to be more drama to come in this," he added.

"But at the end of the day this is going to go away and then what you will look for is yield , you’re going to look for companies that have a lot of cash and sooner or later shareholders are going to say, give us some of that cash," Shea said.

He would buy large-caps stock with great balance sheets, such as Verizon Communications . Companies like that "are going to end up doing just fine," Shea said.


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Disclosure information was not available for Warren Meyers, Michael Shea or their companies.