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Investor Sees 'Day of Reckoning' for GE

Stocks in this article: YHOO IRM GE PVG

NEW YORK ( TheStreet) -- Investors looking for contrarian plays in the coming year may want to try Yahoo (YHOO) and Iron Mountain (IRM), says Adam Seessel, manager of the RiverPark/Gravity Long-Biased Fund.

The mutual fund, which is still awaiting a ticker symbol, was launched Oct. 1 at $10 a share and recently traded at $10.29. The fund invests primarily in large-cap companies, but has the ability to short stocks as well. At last check, the fund was 60% long, 10% short, with the balance in cash. Seessel previously co-managed a $200 million fund at Davis Funds.

Welcome to's Fund Manager Five Spot, where America's top mutual fund managers give their best stock picks and views on the market in a five-question format.

What is your outlook for large-cap stocks in 2011?

Seessel:Generally speaking, we are very bearish on the macroeconomic picture. And in our view, stock prices are fairly valued. So we are not seeing a lot to do out there.

One stock that you are not constructive on is General Electric (GE). Why are you short GE?

Seessel: GE basically dodged the bullet in the financial crisis, but the day of reckoning is yet to come for them, primarily because they have a very toxic bank that holds a lot of subprime assets, both here in the U.S. and in Europe. They have swept a lot of these problems under the carpet. But, at some point, those bills are going to come due.

One company you are fond of is Yahoo. This has been an unloved stock on the Street for a long time.

Seessel:Yahoo has a new manager, Carol Bartz, who is going to turn things around, in our opinion. Meanwhile, they are still the most visited Web site in sports, finance and news. And if you look at the assets on their balance sheet, you are basically getting the company for liquidation value. So any upside is free.

Another contrarian name in your portfolio is Iron Mountain. Why are you partial to this stock?

Seessel: Iron Mountain is unloved. And, as value investors, that's what we look for. Iron Mountain is the leading document-storage provider in America and its basically selling as if it is going to go out of business in 17 years, which is the average contractual life of one of its boxes. Here again, as with Yahoo, if it survives past 17 years, then it's gravy.

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