Stock Under $10 with 50-100% upside potential - 14 Days FREE!

Jump Into Home Depot, J&J

Stock quotes in this article: HD, JNJ, HDPEX 

Yet earnings and cash flow continue to grow and AAA-rated JNJ has raised their dividend 50 straight years. With new management there is a renewed focus on running their business. The acquisition of Synthes is adding to earnings and with earnings of $5.07 (per share) in 2012 and $5.45 (per share) in 2013 stock appears inexpensive to us.

What areas of the market are you presently avoiding?

Bradshaw: Utilities trade at big multiples and are too expensive now. You've probably been hearing that from a lot of fund managers, but we believe it to be true.

Finally, what is your outlook for 2013?

Bradshaw: At Hodges, we are bullish on US equities for 2013 and expect stocks to outperform bonds. All in all, it should be a good year for stocks.

--Written by Gregg Greenberg in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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