Money manager Simon Baker visited the "Breakout" set on its first day of existence, and he's back to review some of the picks he offered then and to discuss a few additional names he likes.
Baker, the CEO of Baker Avenue Asset Management, a $600 million San Francisco-based investment management firm, started his return trip by going over two stocks he championed last time he stopped by -- Caterpillar (CAT) and Simpson Manufacturing (SSD).
Cat closed at $107.59 on March 21, the day of Baker's initial appearance. It went out Friday at $113.12, just pennies short of the 52-week high it hit during the session, for a gain of 5.1%. During the same span, Simpson has climbed to $29.83 from $28.25, a 5.6% advance.
For now, his firm still owns both, but he tells Macke and Nesto in the accompanying clip that he'll be watchful for the appropriate time to head for the exits.
"We're not married to them," he says. "If you see the technicals start to break away, we'll sell them."
Baker also says he likes energy stocks as an investment, saying he believes oil prices will continue to rise, benefiting the group. U.S. domestic oil producers "are going to do well, at least in the short term," he predicts.
One of his picks is Concho Resources (CXO), a Midland, Texas, exploration company, which he views as strong in the near term and sporting "good fundamentals, with good technicals." He's also recommending Carbo Ceramics (CRR), a Houston-based company involved in drilling, where he's looking for earnings growth of 25% this year.
For investors seeking broader exposure to the energy sector, Baker is positive on the PowerShares S&P SmallCap Energy (PSCE) ETF. While a number of ETF options exist, retail investors who want to own the group should look for a fund that is "plain vanilla, no leverage in it," he advises.
Baker's key levels on his new names are as follows: Concho target price $130, stop loss at $98; Carbo target $167, stop at $126; and the SmallCap Energy target price $50, stop at $36.
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- Simon Baker