Investors should focus on smaller, domestic companies like Snap-on (SNA) , Centene (CNC) and Qlik Technologies (QLIK) to stay in sync with a growing U.S. economy, said Dan Veru, CEO of Palisade Capital Management
"We continue to believe that the U.S. economy remains in good shape with reasonable growth that should continue through the year," said Veru. "Expectations for corporate profits are low so the bar is quite low at this point in time."
Snap-on, up almost 28% in 2015, is an industrial company that makes tools and software diagnostics for car repairs. Veru said the business revolves around the number of miles driven by motorists. And that continues to rise due to low gasoline prices.
"Snap-on has also moved into the more technological aspects of repairing automobiles," said Veru. "A car is basically a hybrid of a machine and a computer these days. They have moved into the software aspects of it to repair those components of the car as well."
Veru is also bullish on Centene, one of the largest Medicaid HMOs in the United States. Shares of Centene surged 25% last year, and Veru expects membership to grow as states shift more people to these plans. Furthermore, he said Centene will benefit from its acquisition of HealthNet, which will give the company exposure to Medicare Advantage Plans.
"As they look to save money in their budgets, states are moving more and more of their people into managed care programs and beneficiaries will be companies like Centene," said Veru.
Finally, Veru said he likes business intelligence software provider QLIK Technologies, down 5% in 2015. He said the stock was unfairly punished late last year as a result of an analyst downgrade.
"The analyst was worried that new product introductions might cannibalize existing products," said Veru. "We don't believe that to be the case at all. It's actually the reverse. We believe it expands the market opportunity."