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3 Stocks To Own in an Aging Bull Market


Everywhere you look these days it seems as if there is another reason being put forth as to why the record-high stock market is overdue for a correction.

"I think if you just look at the market, common sense tells you that we'll have a little bit of a sell-off," says Hugh Johnson, the chairman of Hugh Johnson Advisors. "A market that is up 20 to 25 percent in one year," he says "certainly wouldn't be a surprise to give some of that back."

While Johnson says he would welcome a modest retreat, he also remains vigilant and on-watch for opportunities that will do well in what he believes is a bull market that still has more to go.

"This cycle has further to go," he says of the current 56-month old bull market that dates back to March 2009, "Don't give up on it yet." Not only is the duration and performance about average for the post-war era, but Johnson says signals from the economy and financial markets are still positive and telling us we still have further to go, "at least through 2014."

With that in mind, we asked Johnson what he likes now, given that run-up, the risk, and the long-term expectations, and he rattled off three stocks from three different sectors.

Walt Disney (DIS)
Disney may be known for its theme parks and animated characters, but it is its control of ESPN that tops Johnson's list, which he calls the ''crown jewel" of the cable TV business. He also expects to see more dividend increases and share buybacks and says the stock's "positive performance reflects improving fundamentals."

United Technologies (UTX)
Johnson mentions another blue chip member of the Dow Jones (^DJI), only this one is in the industrial sector. Here Johnson points to the elevator, alarm and aircraft maker as a well-managed company that typically does well late in the business. "The Goodrich acquisition last year is starting to really pay off."

Checkpoint Software Technology (CHKP)
Johnson's final pick resides, not in the Dow, but in the red hot Nasdaq 100 which is up 27% this year.
He says the Tel Aviv based firm is a great company "in the sense that they're in the right business." Not only do they create a variety of security systems for technology, but Johnson is also pleased with their strong balance sheet, which has no debt and two billion in cash.

"That gives them lots of flexibility," he says before adding that Checkpoint is "the kind of economically sensitive business that you want to own in an ongoing bull market."