“For the first time in a long time, this is a stock-picker market.”
Quint Tatro
investment director, Joule Financial
Some investors may want to take advantage of the technology’s decline, Delano Saporu, CEO and principal consultant for the New Street Advisors Group, told CNBC’s “Trading Nation” on Wednesday.
If yields continue to rise, despite the Fed’s relatively dovish stance, technology stocks will face “short-term pressure as the market tries to figure out what’s next,” said Saporu. “In the long run, I think it will.”
His main choices in the group were Microsoft and Apple, the two biggest weights in the S&P technology industry.
“In the long run, we will be in a good position,” he said. “So, if you are a long-term investor, this is an opportunity to come in with lower valuations and I think in the long run we’ll see technology moves go up more.”
Saporu was also watching stocks that could see “tailwinds of pent-up demand” – he said the airline represents Delta and United Airlines in a previous email to CNBC – and the video game and virtual reality industries.
“I want to see … what happens perhaps with cryptocurrency games” and non-fungible tokens, the digital collectibles commonly known as NFTs, as video game and virtual reality companies seek to involve them in their strategies, said Saporu .
This market environment has become particularly good for stock pickers, said Joule Financial’s chief investment officer, Quint Tatro, in the same interview with “Trading Nation”.
“For the first time in a long time, this is a stock-picker market,” he said, adding that while Big Tech may remain under pressure with rising rates, “there is an unbelievable opportunity to locate other sectors and stocks. “
“In fact, we would be salespeople for Apple and Microsoft,” said Tatro. “These … we still see them as games to stay at home, and we would be buyers specifically from Facebook, but also from Google as a kind of reopening piece and an advertising piece while small businesses are really looking to regenerate that growth and really stock up these showcases. “
Although often associated with technology, Facebook and Google, Alphabet’s father, are the two biggest weights in S&P’s communications services industry.
Tatro was also looking at a less conspicuous trade.
“I really think investors need to look at a little-known sector that we really lost sight of until recently, which is materials,” he said.
Stocks of materials have increased by about 6% compared to last month and just over 8% in the year to date.
“Specifically, I think industrial metals are very, very interesting here,” said Tatro. “We really like some of the steel games: Commercial Metals, CMC, as well as Reliance Steel. Those are names that have made exceptional gains here in the years to come, especially with … the type of global reflection and growth history back on track , and they have exceptional balance sheets and are selling at real value. “
Disclosure: New Street Advisors Group, Joule Financial, Delano Saporu and Quint Tatro own shares in Apple and Microsoft. Joule Financial and Quint Tatro own shares in Alphabet, Facebook, Commercial Metals and Reliance Steel.
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