Artio Manager Avoids Utilities: Five Spot

NEW YORK (TheStreet) -- Sam Dedio, portfolio manager of the Artio U.S. Smallcap Fund(JSCAX Quote), says technology is the place to be and utilities should be avoided.

The fund, which gets a five stars from Morningstar(MORN Quote), has risen 46% this year. Over past three years, the fund has returned an annual average of 1.5%. In both time periods, the fund outperformed 98% of its Morningstar rivals.

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 bullish or bearish?

Dedio: I am bullish on U.S. equities over our minimum time horizon of two years.

What is your favorite sector?

Dedio: Technology is my favorite sector to invest in because the opportunity set is constantly changing, but I think industrials could outperform the broad averages the next two years.

What is your top stock pick?

Dedio: Myriad Genetics(MYGN Quote) is my top stock pick. It has 90% gross margins and is heading to 40% operating margins. It's trading at 12 times current year 2010 earnings power. Myriad has no competition and a valuable franchise worthy of more in the marketplace or as a take out.

What is your favorite "sleeper" stock pick?

Dedio: LTX-Credence(LTXC Quote) is our sleeper. The back end of semiconductor capital equipment comes back first with volumes. This testing company benefits from wear and tear, depletion of spare parts and industry consolidation. They may surprise people in how quickly they return to profitability as they have whacked the cost structure hard. I think the stock could be $3 if the stars align because it was really hit hard on concerns of their debt burden, which I believe are now overblown.