They say everything is bigger in Texas, and, according to Don and Craig Hodges, that includes highways and hotels.

The Dallas-based father (Don) and son (Craig) team runs the $515 million

(HDPMX) - Get Report

Hodges fund,which is up an impressive 17% for the year to date and almost 20% annually over the last five years. The Hodges fund's strategy is to invest in companies with improving earnings growth regardless of their size. That often means buying large blue-chip stocks or shares of small emerging companies, as well as promising companies in between.

This eclectic approach produces a portfolio in which the familiar blue-chip stocks are combined with out-of-favor or under-the-radar stocks. Furthermore, a large percentage of the companies in the fund are headquartered in Texas, making them even more familiar to the Hodges clan.

Most recently, the Hodges team has been partial to cement stocks in the middle of what they see as a boom in highway building, most notably in Texas. Among their favorite names are two Dallas-based companies,

Eagle Materials

(EXP) - Get Report

and

Texas Industries

(TXI)

.

"Texas Industries is very strong in Texas, supplying 30% of the entire state's needs," says Don Hodges. "They are also prominent in California, which is another huge state for the cement business."

The Hodges also believe that hotels along those highways will be enjoying more business as the economy continues to motor ahead in 2007. Some of their top picks in this sector are

Gaylord Entertainment

( GET),

Host Hotels

(HST) - Get Report

and

Marriott International

(MAR) - Get Report

.

"A lot of supply has been removed from the hotel business," says Craig. "And the pricing power of hotel operators has increased significantly, and that's something we look for when choosing stocks."

Looking ahead, both Hodges are expecting another strong year for equities in 2007.

"A lot of the negative feelings toward stocks that we've seen in the last six months have abated," says Don. "And a lot of new money will come into the market in the first quarter of 2007, which should make for an especially strong start."

Catch the father and son team in a

video interview with

TheStreet.com

.