NEW YORK (TheStreet) -- Investors should not be afraid that rising interest rates will chop down shares of Plum Creek Timber (PCL), says Andy Murray, portfolio manager for the Becker Value Equity fund.
PCL shares have languished this year over concerns about whether the timber REIT will suffer when interest rates start rising, Murray noted, but he has a different perception of what will move the stock in that environment. "I think when rates are rising, we should see a continued recovery in housing starts ... hopefully, thats a reflection of an improving economy," says Murray. And when housing starts improve, he says, we will see prices rising for logs and timber as well.
April housing starts came in at 1.13 million, ahead of Wall Street expectations. Shares of Plum Creek, which pays a 4.2% dividend yield, are down over 4% so far this year.
Meanwhile, Murray is also bullish on Amdocs (DOX) , which has seen its shares jump over 20% year-to-date. Murray says the telecom software provider's stock is surging on the company's merits, not as a result of takeout speculation in an M&A-crazed market. "Management [has] a great long term vision to keep growing that company, and they keep delivering and executing, and the share price reflects that," says Murray.
Another favorite, Discovery Communications (DISCK), has seen its stock fall nearly 7% so far in 2015. In Murray's view, the selloff was excessive, and worries about the network's content are misplaced.
"There is a lot of concern as to whether they don't have enough scripted TV," says Murray, because that is a hot area in content now, while Discovery's main focus is reality, science and educational programming. However, one thing that's great about their content is that it plays well internationally. Half of Discovery's sales come from overseas, he notes, "which makes for a very efficient business model."
Finally, Murray is a fan of shares of Allegheny Technologies (ATI), which has seen its stock drop almost 5% this year.
"Allegheny spent almost a decade building a great platform of assets to make products and metals for the next aerospace cycle," says Murray, and those assets are poised to pay off.