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In a market where the two-year uptrend has been broken, Simon Baker, head of $600 million hedge fund Baker Avenue Asset Management, is seeing entry points in specific companies set to benefit from global tumult.
Baker's primary theme is rebuilding and agricultural-related plays, both in Japan and the rest of the industrialized world. Drilling down into specific names, Baker likes agricultural juggernaut Caterpillar (CAT), an American concern that will benefit from an expansion of food imports into Japan, the world's third-largest economy.
In construction, Baker likes timberland-owning REIT Plum Creek Timber (PCL) and Simpson Manufacturing (SSD). Plum Creek makes the wood, and Simpson makes the connectors holding the assorted parts of a construction project in place.
"Breakout" isn't the kind of program where money managers are allowed to talk their book without the details. Click the video to hear Baker elaborate on his themes, and here are the stop-loss levels where he'd take the pain and sell if the stocks go south.
Caterpillar:
- Entry: Now
- Stop-loss: $97
Plum Creek Timber:
- Entry: Now
- Stop-loss: $39
Simpson Manufacturing:
- Entry: Buy and hold
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