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TheStreet Open House

[video] Two Real Estate Value Finds

Stocks in this article: PCLHHC

The video this transcript is based on appeared on December 2nd.

NEW YORK ( TheStreet) -- Becker Capital Management's Pat Becker Jr. says there's shareholder value in Plum Creek timber and Howard Hughesand there is also room for the S&P 500 to gain in December.

VIDEO TRANSCRIPT:

Joseph Deaux: With a strong manufacturing number that came out on Monday and more economic data that's pointing toward a strengthening economy, I have today with me, Pat Becker, Jr., of Becker Capital Management. Pat, thanks so much for being here.

Pat Becker: Nice to be here.

Joseph Deaux: Pat, let's jump right to it. Do you think that this better-than-expected manufacturing number, a lot of good economic data coming out, is actually going to hurt the S&P in the final month of 2013?

Pat Becker: We don't think so. Part of it is the participation in this market from the investor level. A lot of people are just discovering the market again and coming back into it. You also have pension flows that have been increasing. So while you get these numbers on manufacturing and whatnot that indicate the economy is getting better, we also see some of the numbers from Black Friday on the retail sales side that are a little bit weaker. So it's a bifurcated economy. There are some areas like the stock market doing very well, real estate doing very well, but there are areas that aren't as well.

Joseph Deaux: So, of course, when I say do you think it'll hurt the S&P, I am referring of course to the fed possibly tapering sooner rather than later. But with this bifurcated economy that you're talking about, are there a couple of names that you guys are looking at that you really like?

Pat Becker: Yeah. We do. We like Plum Creek Timber, largest timber owner in the U.S. Pays about a 4 percent dividend. It's one of those stocks that kind of got hurt earlier this year in May, July, August when interests rates went up. But it's a company that does well. Interests rates going higher, means the economy's doing better, you've got more building activity typically when that happens, and lumber prices are really at a cyclical low. There's been a beetle kill in Canada, which has increased our market share on a worldwide basis. So that's the name that we like for income, but also like for growth as well.

Joseph Deaux: Who else are you looking at?

Pat Becker: We like Howard Hughes. It is an unknown company. You think Howard Hughes is like satellite. You think the old GM, but it is a real estate company. They own Pier 17 here in New York. They're one of the largest landowners in Vegas, large landowner in Hawaii, and they're redeveloping those products. It trades about two times book value. Most of the home builders trade at three times book value and so that delta we think, they've got a better collection of assets than most of the home builders. So we think there's some nice upside there.

Joseph Deaux: Pat, before we let you go, we're coming up on the holiday shopping season. I already started. Do you change your investment strategy at all this time of year?

Pat Becker: No. We're bottom-up, long-term investors. So when we look at companies, we're looking at long-term. Whether it's a Christmas season or not, we try to look at it through a false investment cycle and that can be up to five years.

Joseph Deaux: All right. Well, Pat Becker, thanks so much for being with us. We hope to have you back from the West Coast.

Pat Becker: Thank you.

Joseph Deaux: For The Street, I'm Joe Deaux.

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