Editors' pick: Originally published Feb. 10.
Spectra Energy Partners (SEP) is down over 23% in the past year, but the worst is likely behind both the pipeline player and natural gas prices, said Tom Forester, portfolio manager of the Forester Value Fund (FVALX) .
"It's growing in the Northeast as people shift from heating oil and coal to natural gas," said Forester. "Think of it as a growth utility because it is growing EBITDA by about 10% a year, has a 5.5% dividend and still has an attractive valuation."
Spectra is a recent addition to Forester's fund, so he said he purchased it at an attractive price. The $98 million Forester Value Fund is up 1.8% so far in 2016, according to fund-tracker Morningstar. Year to date, the fund is outperforming 95% of its peers in Morningstar's long/short fund category. Forester protects his downside on the fund by purchasing protective put options on the S&P 500 (SPY) when markets turn turbulent.
Forester is also bullish on Tyson Foods (TSN) , up 14% year to date, because of its move into prepared foods, where margins are higher.
"Last year they had problems with beef margins, but that's coming back now -- you saw that in the quarterly update," said Forester. "They had fixable problems when we bought it, and we still think they have some fixable problems. They have a lot of upside."
Finally, Forester is a fan of Pfizer (PFE) , which is down 8% thus far in 2016. Forester said the company's November decision to purchase Ireland-based Allergan (AGN) for $160 billion in a tax inversion deal will not cause too many repercussions for the drugmaker. Furthermore, he said Pfizer is done being hit by blockbuster drugs coming off patent and is now adding to its pipeline instead.
TheStreet's Jim Cramer holds Allergan stock in his Action Alerts PLUS Charitable Trust Portfolio. On Friday, he and Research Director Jack Mohr wrote of the Allergan-Pfizer tie-up, "Ultimately, we believe the deal will be extremely valuable for shareholders and see even further catalysts when the combined company later decides to split into two separate entities, one growth-oriented and one established."
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"We think low valuation, good growth ahead and a better tax rate will drive [Pfizer] stock higher," said Forester.