At the beginning of the year Bob Doll, chief Equity Strategist at Nuveen Asset Management, released his top stock picks for 2014. Microsoft (MSFT) is up 18% for the year, but Pfizer (PFE) and Boeing (BA) are down 7.8% and 11.8% respectively.
Doll stands by his pick in the drug sector. He says Pfizer is cheap compared to other pharma names. Plus in this low yield environment, he says Pfizer dividends can’t be beat. Doll explains the Astra-Zeneca deal falling part may have played a part in the stock drop but he thinks down the road the company will breakup and maximize value for shareholders.
The other pick is jet maker Boeing. He credits the resurgence in the airline industry as the reason. He sees Boeing as well placed to add onto their backlog of aircraft orders, saying “the backlog’s gonna grow, they’ve lotta cash, they’ve doubled their dividend this year, they’ve bought back $5 billion worth of stock but the free cash flow story is pretty impressive.”
Broadening his equity picks, he also likes Ford (F), Hewlett-Packard (HPQ) and Gilead Sciences (GILD).
Ford is up 11% since the start of the year and Doll likes the stock because he says the automaker is growing market share in Asia. He backs the company’s new leadership and says Ford is well poised to grow cash flows.
He also likes the leadership at HP. Ebay veteran Meg Whitman is at the helm of the tech giant and Doll says her job is cut out for her, pointing out, “ She inherited a lot of issues and has to tackle them one at a time. I think there are more opportunities to streamline the business, become more efficient, they might even grow some revenue some day.“ HP is up 27% this year.
Finally in the biotech sector, Nuveen is buying Gilead simply because it has good earnings and cash flow despite the high multiple attached to it. He is bullish that drug pricing issues will subside and product growth will translate into stock appreciation. Gilead finished Wednesday just shy of $94 a share or a little more than 24% for the year.
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