This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Jump Into Home Depot, J&J

NEW YORK ( TheStreet) -- Large-cap dividend payers Home Depot (HD - Get Report) and Johnson & Johnson (JNJ - Get Report) are poised to move higher as the economy gradually recovers, says Gary Bradshaw, co-portfolio manager for the Hodges Equity Income Fund (HDPEX).

The $17 million fund, which garners five stars from fund rater Morningstar, has returned 14% in the past year.

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

What is your view of the economy?

Bradshaw: At the Hodges Equity Income Fund we remain encouraged that the U.S. economy will continue to recover at a tepid pace, yet gradually improve. We like what we see in the housing recovery and although unemployment will remain high it will get better. We think the U.S. market will be the best market to invest in 2013. Investors continue to sell their equity mutual funds and buy bond funds. Unfortunately, we think this is the exact opposite of what they should be doing. It makes no sense to us that investors continue to buy bonds at these anemic yields.

Based on that outlook, what is your top stock pick?

Bradshaw: Home Depot is our top pick. We look for companies with improving cash flow, growing earnings and increasing their dividends. HD benefits not just from the recent superstorm Sandy but also other past storms as communities continue to rebuild.

All the foreclosed homes that are being fixed up and of course the housing recovery that is in the first inning will be a plus. We believe HD is taking market share not only from Lowe's (LOW) but also the local hardware stores. We think earnings will accelerate to $3.00 (per share) for the fiscal year ending Jan 2013 and $3.40 (per share) for the fiscal year ending Jan 2014 and HD recently raised their dividend by 12.5%.

What is your top "sleeper" or "under the radar" stock?

Bradshaw: It may be a massive company, but Johnson & Johnson is a sleeper stock when it comes to dividends It's now yielding an impressive 3.42%. This stock has not moved significantly for 12 years and all the product recalls last year have left a bad taste in investors' mouths.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
HD $118.94 0.22%
JNJ $94.97 1.70%
AAPL $109.90 -1.30%
FB $91.67 -1.20%
GOOG $636.32 -1.40%


Chart of I:DJI
DOW 16,832.28 +42.09 0.25%
S&P 500 1,977.99 -1.93 -0.10%
NASDAQ 4,736.01 -12.3510 -0.26%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs