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Ragen Stienke, manager of the

WHG SMid Cap Fund

(WHGMX) - Get Westwood Quality SMidCap Instl Report

, says he's steering clear of financial-services stocks, among the best performers in the rally that started in early March.

Stienke favors technology companies for his $121 million fund, which has earned a top ranking of five stars from Morningstar. The WHG SMid Cap Fund has fallen 30% in the past year, less than 91% of its rivals. During the past three years, it has declined an average of 3% annually, compared with a 10% loss for the


2500 index.'s Fund Manager Five Spot

is where America's top mutual fund managers give their best stock picks in five fast and furious questions.

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Are you a bull or bear?


We are neutral on the market. After the recent snapback of over 20%, we believe the market is already discounting a recovery and that the balance of risks is even.

What is your top stock pick?


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We have a value focus with specific regard to downside risk. Our first concern is to quantify how much money we can lose if and when we are wrong. We compare that to the opportunity for gain if and when we are right. We buy stocks when our reward-to-risk ratio is greater than 3 to 1.



represents a unique combination of early cyclical exposure to an industrial upswing, and defensive characteristics due to recurring revenue from rentals. In addition, this downturn gives Airgas further opportunity to consolidate a fragmented industry.

What is your top "beneath the radar," or "sleeper," stock pick?


Brink's Home Security


is a recent spinoff that trades well below multiples afforded to competitors with much less scale and brand equity. We believe the market under-appreciates the growth and revenue stability they are experiencing.

What is your favorite sector?


We really like technology, specifically software. We think the defensibility of earnings, margins, returns and free cash flow nature of the industry is not reflected in multiples.

What sector or stock would you avoid?


Despite the run-up, we are avoiding financials, specifically regional banks. We believe the market has not properly priced the risk that loan-loss reserves may prove way too conservative relative to actual losses.

Before joining, 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.