NEW YORK (
) -- Ron Altman, co-manager of the
Aston/M.D. Sass Enhanced Equity Fund
, says a growing acceptance of nuclear energy will create one of the best investment opportunities in the next decade.
The large-cap fund, which invests in both growth- and value-style stocks, has risen 23% this year, better than nearly 70% of its
peers. Over the past year, the Aston/M.D. Sass Enhanced Equity Fund is up over 15%, more than almost 80% of its rivals.
Welcome to TheStreet.com's Fund Manager Five Spot, where America's top mutual fund managers give their views and picks in five questions.
Are you bullish or bearish?
Given the magnitude of the advance since the market bottomed in early March, I would expect some consolidation of that move to occur. However, considering how much corporate borrowing costs have declined relative to Treasuries and the upside surprises on the earnings front, we believe the longer-term direction for the equity market will have an upward bias. The easy money has been made now. That being said, it will be more of a stock-picking, rather than stock-direction, market.
What is your favorite holding?
My single favorite stock is
, an engineering and construction company that is significantly exposed to power-plant construction, particularly nuclear. We believe that over the next five to 10 years, there will be an upturn in nuclear power plant building worldwide. Considering the orders that the company already has in its backlog and those that are being negotiated, the earnings potential for this company is much greater than analysts are willing to state at this time.
What is your best "sleeper" stock pick?
One company that we believe has been overlooked by the sell-side is
. This is a new telephone company, given that it is the result of a merger between Century Telephone and Embarq, which was the local telephone part of
. Century's management team will be running this business going forward and, based upon their track record, they should exceed the stated synergies over the next several years. Couple a positive fundamental outlook with a current dividend yield of 8.25%, and we believe the total return could easily be 20% plus.
What is the most attractive sector?
As far as our favorite sector is concerned, we like the industrial segment. In our opinion, the global economic driver is more likely to be infrastructure than any other area. In this country, we need to spend heavily on every aspect of infrastructure to refurbish a decaying water, road and transportation system. Outside this country, all the developing countries will have to expand their infrastructure just to support their growth objectives, particularly the BRIC's.
Which sector or stock would you avoid?
Consumer staples are probably going to have the worst relative earnings growth of any major industry segment. Additionally, that segment does not have an overwhelming current yield that would support a total return argument. Lastly, a cost-conscious consumer will trade down to store brands, which carry lower margins for the suppliers of these products.
Before joining TheStreet.com, Gregg Greenberg was a writer and segment producer for CNBC's Closing Bell. He previously worked at FleetBoston and Lehman Brothers in their Private Client Services divisions, covering high net-worth individuals and midsize hedge funds. Greenberg attended New York University's School of Business and Economic Reporting. He also has an M.B.A. from Cornell University's Johnson School of Business, and a B.A. in history from Amherst College.