'Real Money' Radio Wrap-up: In Search of Growth

Guest Noah Blackstein doesn't just look at technology.
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Growth stocks both in and out of the tech sector got an airing on Jim Cramer's

"RealMoney" radio show Friday, with Aaron Task filling in as host and welcoming Noah Blackstein, manager of the Dynamic Power American Growth Fund.

Task and Blackstein expressed puzzlement with Friday's action in the stock market, with the

Dow

up 150 points following a lukewarm employment report. Blackstein said other money managers had reported being "perplexed" by the big move, which comes just a day after terrorists' bombs ripped London.

Still, peculiar action is typical of a pre-earnings period. "That's going to be the tale of the market," Blackstein said. "We have to see how the earnings are going to be. So far, we really haven't seen any big-name preannouncements."

Blackstein had praise for two stocks he's owned:

Whole Foods

(WFMI)

and

Urban Outfitters

(URBN) - Get Report

, both of which have seen major runs but remain attractive to him over the long term.

"With Whole Foods, you have to wait a little while. It's a company I was buying on pullbacks with the general market," he said. "I like Urban on weakness and if the stock doesn't do anything for a little while -- if it pauses for four, five or six months to let the fundamentals catch up with the valuation."

Asked about

Aeropostale

(ARO)

, Task said he "can't condone" buying it, citing recent sales returns where "the trend does not seem to be your friend."

Blackstein said the company is "highly dependent on volume" while

American Eagle Outfitters

(AEOS)

"looks really cheap." He said he'd take that stock over

Abercrombie

(ANF) - Get Report

and prefers Urban Outfitters to Aeropostale.

Blackstein praised

Google

(GOOG) - Get Report

, which has made his fund money, but said he wouldn't advise against "ringing the cash register" for investors with a shorter-term outlook.

"The secular story is still there. It depends on your time horizon."

Blackstein spoke well of

Paychex

(PAYX) - Get Report

, a stock he doesn't own but is impressed with after a "tremendous quarter."

"If you're bullish on small business, bullish on payrolls, if rates are going up and payrolls are going up, then they're doing well," he said. "If you've been patient thus far, you should hold on to it."

Task and Blackstein debated dividend stocks, with Task recommending the Fidelity Contra Fund to investors who want exposure to

Berkshire Hathaway

(BRK.A) - Get Report

, which some analysts believe is preparing a payout.

Blackstein was less sanguine on dividends in general, noting that valuations often depress after they are announced as investors worry management is out of ideas.

"What the company is sometimes saying is, we don't have any alternatives to invest money in," Blackstein said. The same could even be true of a genius like Warren Buffett. "If he does pay the dividend, it might mean he can't find the opportunities anymore."

In response to listener calls, Task said he liked

Time Warner

(TWX)

, which might have latent value online; and liked

Altria

(MO) - Get Report

, which sports a 4% yield. Task said he preferred

Merck

(MRK) - Get Report

to

Pfizer

(PFE) - Get Report

and recommended selling

Onyx

(ONXX)

heading into earnings.

Aaron L. Task is the co-executive editor of TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to

atask@thestreet.com.