COLUMBUS, Ohio (TheStreet) -- Randy Bateman, manager of the Huntington Situs Fund (HSUAX) - Get Report, says investors should consider the advantages of companies based in Texas and North Carolina, such as Texas Industries (TXI) and Red Hat (RHT) - Get Report.
The $182 million fund, which has earned three stars from
, has returned 5.8% annually, on average, during the past five years, better than 69% of its large cap blend peers. The fund has gained 50% during the past year, as the
S&P 500 Index
Fund Manager Five Spot, where America's top mutual fund managers give their views on the market though a five questions.
Why do you like to buy Texas-based companies?
The mutual fund that I run is called Situs and a lot of the thinking that goes into it is focusing on those companies that have a geographical advantage such as immigration into the state or region, proximity to raw materials or markets, or less onerous taxes. Interestingly enough, Texas enjoys all of those. They have immigration going in and they have low taxes and a couple of industries like oil and technology that are burgeoning there.
The infrastructure bill has legs. It's a scenario that not only has been attached to the current administration, but even prior to that, there was a recognition that we need to restore a lot of our infrastructure. Trinity's rail line and highway guard rail businesses are going to be beneficiaries of this trickle down that's ultimately coming from the bailout funds.
Other than the fact that it's based in the Lone Star State, why do you like Texas Industries?
They are in the cement manufacturing business, and as we develop our highways, cement is going to be a major factor. Obviously, they have been harmed by the lack of a building over the past few years, but that's going to recover as well. Mostly it's an infrastructure play. It's a cheap stock too.
Another business friendly state in your opinion is North Carolina. Why?
They have a lot of universities down there, including two major engineering schools. They also have the think tanks that come out of Duke and Wake Forest and the University of North Carolina. We have looked at a lot of companies that are drawn to the talent they can tap there. Companies like Red Hat and
benefit a great deal from the intellectual talent available in North Carolina.
Aside from its home state, why do you like Red Hat?
They have a unique software package that integrates well with other major software and hardware producers. They make the Linux software run more efficiently and effectively. It's a well run company and its right there in the Research Triangle area so it's going to attract top talent and respect from the Street because of that.
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.