Five Spot: Bacarella Big on Bank of America

Robert Bacarella, manager of the Monetta Fund(MONTX Quote), said out-of-favor industries such as banking, airlines and gaming are offering bargains.

The fund has returned 20% this year, beating 90% of its rivals in the multi-cap growth category. The Monetta Fund has risen an annual average of 1.6% over five years, compared with a decline of 1.3% for its peers.

Welcome to TheStreet.com's Fund Manager Five Spot, where America's top mutual fund managers give their best stock picks in five fast and furious questions.

Are you a bull or a bear?

Bacarella: Near term, I am market neutral as the future market direction will largely depend on the strength of the economic recovery. Since March, the markets have rallied from an extremely oversold condition and current prices reflect an economic environment that is stabilizing.

What is your top stock pick?

Bacarella: My top stock picks are the "best of breed" companies primarily in the technology sector, which include Apple(AAPL Quote), Google(GOOG Quote) and Research In Motion(RIMM Quote). These companies should do well as the economic environment improves.

What is your top "beneath the radar" stock pick?

Bacarella: The highest risk/return stocks tend to be those in out-of-favor sectors. We believe that opportunities exist in the airline, gaming and banking sectors and specifically in MGM Grand(MGM Quote), Las Vegas Sands(LVS Quote), AMR Corp.(AMR Quote) and Bank of America(BAC Quote). I believe these stocks are extremely oversold and offer good long-term capital appreciation potential. Most investors are currently avoiding these sectors, which is creating a good buying opportunity.

What is your favorite sector?

Bacarella: My favorite sector is technology, followed closely by energy and metals. As economic conditions improve, these sectors tend to lead a market advance.