The large-cap value fund has risen 32% this year, better than 85% of its Morningstar (MORN) peers. The fund's top holdings include eBay (EBAY - Get Report), Franklin Resources (BEN - Get Report) and Starbucks (SBUX - Get Report).
Welcome to TheStreet'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 bear?Smead: We are bulls. The point of maximum pessimism was in early March and was probably a 30-year extreme in pessimism. It will take years to work off the negative sentiment toward stocks. Also, it has been eight years since large-cap, recession-resistant quality stocks were in favor on either a relative or absolute basis. As U.S. households increase their saving and commit some of the massive amounts of cash in low-interest liquid accounts to the stock market, brand-name companies could get a large part of the affection. What is your top stock pick? Smead: eBay is our top stock pick and the No. 1 position in the Smead Value Fund. We are "bottom up" stock pickers and this one has something for everybody. First, eBay is a sum-of-the-parts story. They own PayPal, Bill Me Later, StubHub, 28% of Craigslist, 30% of Skype, five of the six largest online classified advertising firms in the world and the greatest online auction business in the world. They're also sitting on $5 billion-plus in cash, with no debt.