5-Star Portfolio Manager: Stick to Value Discipline
Value investors and stock managers must “stick to your discipline” while the stock market returns to stability, said Harvey Neiman, portfolio manager of the Neiman Large Cap Value Fund — rated five stars by Morningstar.
That means he will stick to investing in some familiar companies whose shares are trading for less than their intrinsic values, he told CNBC Wednesday — namely, Aetna [AET 45.23 
1.14 (+2.59%) 
] , Canadian National Railway [CNI 81.05 1.15 (+1.44%) ] and Kraft Foods.
In particular, the “dividend play on Kraft [KFT 35.47 0.24 (+0.68%) ] is solid, and it’s America’s consumption,” he said.
“We know the labels. It’s a comfort.”
But billionaire investor Norman Peltz’s recent purchase of 12.2 million Kraft shares “won’t change my mind one way or another,” Neiman said.
In the same interview, Frank Germack, director of investments at Rehmann, said he is looking for value in large-cap stocks. His two picks are Southwestern Energy and Covidien.
Southwestern [SWN 43.80 0.92 (+2.15%) ] is one of the lowest-cost energy producers, he said. “They can extract gas from shale better than anyone else,” he said, and the firm is expanding into new areas to drill. “If we do see natural gas prices start to firm and rebound, Southwestern is poised to do well, given their efficiencies.”
Covidien [COV 54.22 0.99 (+1.86%) ] , meanwhile, is “a global play in health care” thanks to its many businesses including surgical equipment manufacturing and pharmaceuticals. Germack said 45 percent of the company’s growth has come from outside the U.S., 15 percent of that from southeast Asia.
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