Safran (SAFRY) is down almost 2% thus far in 2016, but the French aerospace giant's stock will rocket higher as the transition to narrowbody jets takes off, said Danton Goei, portfolio manager for the Davis Global Fund (DGFCX - Get Report) .
"Safran currently has almost nine years of narrowbody engine production in backlog, which gives downside protection in the event of a pull-back in air travel," said Goei. "Once installed on wing, Safran engines effectively have a captive aftermarket."
The Davis Global Fund is up 3.5% thus far in 2016, according to Morningstar. The $434 million fund has returned an average of 6.4% annually over the past three years, outpacing 81% of its rivals in Morningstar's world stock category.
Goei is also bullish on New Oriental Education (EDU - Get Report) , up 36% year to date, saying the leading Chinese private education provider is blessed with huge demand for its services because 80% of students attend after school tutoring in a country where high school and university admission tests are hugely important.
"The market is very fragmented market with 40,000 small competitors. New Oriental is number one, but only has a 1.5% market share. And number one and two together have less than a 3% market share," said Goei. "They have a great opportunity to grow by taking share over many years."
Natural gas driller EQT Corp. (EQT - Get Report) is another one of Goei's top picks. EQT's stock is up 35% thus far in 2016 and Goei said the good times will continue as EQT pumps out more product from its Marcellus shale wells.
"The pipeline grid provides an important link to the market for producers in southwestern Pennsylvania, an area we think will take share from other sources of gas due to its low cost position. Operating and financial leverage is very high on pipelines," said Goei. "So, volume increases on the pipeline mostly fall to the bottom line, increasing earnings and free cash flow."
Finally, Goei is a fan of Alphabet (GOOGL - Get Report) , which has seen its shares rise 2% thus far in 2016, saying the Internet giant will continue to see advances in mobile search and Youtube advertising even as it pursues its so-called "other bets."