"Market Monitor"-Eugene Peroni, Portfolio Manager for Advisors Asset Management
Friday, June 12, 2009PAUL KANGAS: My guest "Market Monitor" this week is Eugene Peroni, portfolio manager for Advisors Asset Management and Gene, welcome back to NIGHTLY BUSINESS REPORT.
EUGENE PERONI, JR., PORTFOLIO MANAGER, ADVISORS ASSET MGMT.: Pleasure to be back here, Paul, thank you.
KANGAS: I know that you base a large part of your investment strategies on the market's technical behavior. What are your technical tools saying about the current market?
PERONI: I think we're in a confirmed uptrend and I base this on the price architecture that we see and our bigger charts, on the money flow analysis, especially the non-block, the smaller trade money flow, characteristics are very good and the relative strength that we're seeing in a number of different sectors since we began the bottoming process last October. It's also very encouraging because it's the same leadership that we had seen prior to the financial downfall. So many of the sectors that were doing well between 2002 and 2007 are once again the leaders in this market. That I think is very encouraging.
KANGAS: I give you your choice, A, this is a brand new bull market emerging, or B, it's an old bear staging some pretty impressive rallies occasionally. A or B?
PERONI: I have to go with A on that. I think that this is a bull market.
KANGAS: All right. What indicators are most bullish that you're looking at?
PERONI: Well, the money flow indicators are quite good. The volume indicators are not as strong as we'd like to see, but it some ways that's encouraging because it means that many investors are still sidelined and have yet to come into the market to push it higher longer term. So I think we have yet to see that come along.
KANGAS: What are your favorite stock sectors and why?
PERONI: Well, I favor the emerging market growth theme. So we're skewed more toward manufacturing, infrastructure, metals, materials, energy. This is a broad-based market.
KANGAS: What market signs are you watching the most closely?
PERONI: Well, I would say that for now, we're looking at where the leadership has been since the bottom last October. And we see that some of the stocks have been extended near term but we do expect that the temporarily extended conditions to be resolved, just by normal rotational behavior.
KANGAS: OK.
PERONI: So we think we will see some of that and some sectors that were underperforming recently, could get a little bit of a move here. Some of the stronger sectors like the materials and the metals pull back a bit over the next few weeks.
KANGAS: Interesting. Your last visit with us was January 30 of this year and you gave four stock recommendations. Let's have a look and see how they've done. CR Bard (BCR) down 13.5 percent. Still with it? Would you buy it here?
PERONI: We do like it for the long term.
KANGAS: OK. Floserve (FLS) you did really well, up 58.3 percent. Are you taking some money off the table there or staying with it?
PERONI: We're staying with that one. We think it still has very good leadership characteristics for the long haul.
KANGAS: OK, then moving along to your third and fourth choices. Lockheed (LMT) hasn't done much, about the same as it was, but that's not bad in recent market times. Are you still with it?
PERONI: We are. And we do like the defense contractor group.
KANGAS: And SPX Corp (SPX) did well, up nearly 20 percent. Some good calls there, Gene, I congratulate you.
PERONI: Thank you, Paul.
KANGAS: How about some new recommendations for our viewers?
PERONI: Well, again, back on the defense contractor theme, a like Alliant Technologies (ATK), symbol ATK on the New York Stock Exchange.
KANGAS: OK and the $90 issue and it's been a lot higher. And let's hope it returns to that old high. Number two pick.
PERONI: It's Freeport McMoran (FCX), again, we do like the materials, the metals. This is a good play in copper and to some extent the gold play as well, symbol FCX.
KANGAS: Very good, number three.
PERONI: Number three is Noble, symbol NBL on the New York Stock Exchange. We believe that oil is still headed higher here. It could correct a little bit over the short run, but I think that there is the potential for new record highs in oil over the next three to five years. We do like the energy group and Noble is a leader in that category.
KANGAS: And time for one more quickly.
PERONI: Powell, symbol POWL. This is a company involved in distribution of power. They service the energy, transportation and utility sectors.
KANGAS: Do you own any of these stocks personally, Gene?
PERONI: Only through the investment trust that I supervise.
KANGAS: OK, indirectly. Our time has run out, but thanks for being with us again. It's always a pleasure.
PERONI: It's my pleasure, thank you, Paul.
KANGAS: My guest Eugene Peroni of Advisor's Asset Management.
