BETHESDA, Md. (
) -- Jordan Smyth, co-manager of the
Meehan Focus Fund
, says the bull run will continue and health care stocks are the best way to take advantage of the improving economy.
The fund, which garners four stars from
, has risen 21% this year. Over the past three years, the Meehan Focus Fund has lost an average of 2.8% annually, on average, better than 89% of its rivals.
Welcome to TheStreet.com's Fund Manager Five Spot, where America's top mutual fund managers share their investment views in five fast and furious questions.
Are you a bull or bear?
We are bulls. We see many signs that the economic recovery is underway and may be stronger than most people are expecting. That good news should allow the stock market to extend this rally.
What is your top stock pick?
A top pick right now is the U.K.-based liquor, beer and wine producer
, which has eight of the world's top 20 spirits brands, a formidable distribution network and steady cash flow. The stock trades for 14 times forward earnings and sports a dividend yield of 3.6%, and it offers exposure to rapidly growing emerging markets. These shares should do well as consumer spending picks up.
What is your top "under-the-radar" stock pick?
Construction and mining equipment manufacturer
gets about 70% of its sales from outside the United States and, like Diageo, will benefit from improvement in the global economy. A focus on a diverse range of niche categories in which it has dominant positions, combined with extensive outsourcing that improves capital efficiency, should allow Terex to rebound from the drop-off in demand and profitability over the past several quarters.
What is your favorite sector?
Health care stocks have been beaten down amid all of the uncertainty regarding reform efforts, and some of them are great buys now. Drug companies, health insurers and device makers will continue to play an important role in any likely reform scenario, and the market is currently underestimating their potential.
What sector or stock would you avoid?
We are avoiding banks until we can get a better handle on their exposure to bad loans and their prospects for the next several years. It is too difficult for us to know what is really going on in these complex institutions, so we are waiting for more clarity before considering investments in the sector.
-- Reported by Gregg Greenberg in New York
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.