Hennessy Fund Predicts Shopping Surge

STAMFORD, Conn. (TheStreet) -- Frank Ingarra, co-manager for the Hennessy Cornerstone Large Growth Fund(HFLGX), expects consumers to defy skeptics this holiday season and companies to boost technology spending next year.

The fund has risen 52% since it was introduced on March 20, while the S&P 500 Index has advanced 47%. Its top holdings include Coach(COH), Western Digital(WDC) and Cummins(CMI).

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?

Ingarra: We are bullish. Since hitting their lows in March, the major indices have rallied back over 60%. There is certainly some ground to make up for the markets to return to their pre-recession levels, but I believe we are in the midst of a recovery and that the markets have now made a move back to "normal," where growth is based on fundamentals.

What is your top stock pick?

Ingarra: One metric we utilize in selecting stocks in the Hennessy Cornerstone Large Growth Fund is the price-to-cash flow ratio. The model selects stocks trading at attractive prices relative to the cash they're generating. One company that falls into that category is the Gap(GPS). It's a company generating very strong free cash flow while trading at less than 10 times its cash flow, right in line with the median multiple for stocks in the retail space.

All things considered, the consumer has really shown a remarkable resiliency during this recession, and we think that will continue this holiday season. The company has really ramped up its marketing with a goal towards up-selling customers and increasing store traffic during the holiday season. We feel as though these efforts will bear fruit. The company is poised to complete a really strong fourth quarter.