Hennessy Fund Predicts Shopping Surge

What sector or stock would you avoid?

Ingarra: We believe that there is value in every sector, however, investors may want to adopt more of a wait and see approach with the health care sector as impending industry reform in Congress may ultimately crimp profits for these companies. Also, a number of profitable industry drugs are going off patent in the next few years.

In our model, the majority of health care stocks are not making the cut because of their lower returns on total capital and higher price-to-cash-flow ratios. While some stocks in the sector may do well, such as generic pharmaceutical manufacturers, there are many wild cards in this sector.

-- Reported by Gregg Greenberg in New York.

>To order reprints of this article, click here: Reprints