NEW YORK (TheStreet) -- Stephanie Link, the co-portfolio manager of the charitable trust Action Alerts Plus she runs with Jim Cramer, told TheStreet's Lindsey Bell more investors are rotating into the financial sector.
Link believes that it is very encouraging to see the financial sector lead the markets higher because it shows that the economy is actually growing. She also thinks if the financial sector can continue at this pace, the broader markets go "another leg higher."
With "rates starting to rise and the steepening of the yield curve, these companies [will] become much more profitable," she told Bell.
Asked which financial stocks to put your money into, Link told Bell investors should stay diversified. The financial sector is big and therefore gives you plenty of room to diversify your holdings between regional banks, insurance and credit cards, she explained.Specifically, Link mentioned JPMorgan Chase (JPM) because it has underperformed its peers for the year to date, in part because of the criticism of CEO Jamie Dimon. But with that over now, she believes that the stock will begin to "play some catch-up." She also likes Wells Fargo (WFC) for its positive operation leverage, as well as KeyCorp (KEY) and Hartford Financial Services (HIG). JPM, WFC, KEY and HIG are Action Alerts holdings. Asked about other names on Link's radar, she told Bell that while they seem overbought now, Discover Financial (DFS) and American Express (AXP) are on her watchlist.
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