Ari Sass, portfolio manager for the M.D. Sass Equity Income Plus fund, said Aramark shares could surge if new CEO Eric Foss turns that around.
"We think they can grow their margins several hundred basis points over the next several years," Sass said. "That translates into about 40% to 50% earnings growth."
Shares of Aramark are up about 2.5% so far in 2015. The M.D. Sass Equity Income Plus fund, which employs a covered-call strategy that can raise yield by capping a stock's upside, has returned just over 2% year-to-date.
Sass is also bullish on Sinclair Broadcast Group (SBGI) - Get Report, up 8.5% year-to-date, because he said the company will see a boost as it enters the political spending season and has the potential for higher subscriber fees.
"They are collecting retransmission revenue from the cable operators," Sass said. "Broadcast is generally about a third of all viewing, and they have much less than that in retransmission fees. We think there is a lot of upside in their subscriber fees with the cable operators; plus, you have the benefit of the political revenue coming in 2016."
Sinclair's dividend yield is 2.3%, and while that is healthy in the current low-yield environment, it pales in comparison to the 6.2% payout of another one of his picks, Gaming and Leisure Properties (GLPI) - Get Report. The casino-real estate investment trust is up 22% in 2015 and is bidding to acquire the real estate assets of Pinnacle Entertainment (PNK) - Get Report.
"It's a great deal if they get it, and they definitely can afford it," Sass said. "It will be a combination of stock and debt. They have already spoken to the rating agencies. They will maintain their rating."
Finally, Sass is positive on shares of Six Flags (SIX) - Get Report, which are up over 11% year-to-date, saying that consumers are finally spending the money they are saving from lower energy prices and that the amusement-park giant has strong international prospects.
"We are going to see licensing to Asian and Middle Eastern companies looking to open up a Six Flags-branded park internationally," Sass said. "That's a huge opportunity for them. We also think there are pricing opportunities."