Who needs sexy when you can make double-digit yields? So asks Bryan Perry of Cash Machine, who shares some of his favorite plays today.
Nancy Zambell: My guest today is Bryan Perry, the Editor of Cash Machine, published by InvestorPlace Media. Bryan, welcome, and thank you so much for joining me.
Bryan Perry: Good to be with you. Thank you for having me.
Nancy Zambell: Today in the market, we are seeing history made, aren't we?
Bryan Perry: We sure are. In the Dow and S&P. But if we take out the historic highs, the Nasdaq is still 30% below its market high of 5,000, set back in 2000.
Nancy Zambell: That's probably a good thing, right?
Bryan Perry: Yes, that was a true bubble. But even with Apple (AAPL), the big leader for the last couple of years, the market is still down for the count right now.
A lot of it (the rise) has been led by consumer staples—Johnson & Johnson (JNJ), General Mills (GIS), Clorox (CLX), Colgate-Palmolive (CL), and Hershey (HSY), etc. Some of that was sparked by the buyout of Heinz (HNZ) by Berkshire Hathaway (BRK.B), but they are the types of names—the everyday products—that people have to have.
Some discretionary names have started participating as well, primarily those related to housing, like Home Depot (HD). They’ve really led very well in the home improvement area. If people are going to spend money in this economy, they want a return on that money, and that is right back into the home, in their nest egg.
Nancy Zambell: They are not really sexy stocks, are they?
Bryan Perry: No, they're not. I think that is a good thing that we are not being lured into those types of companies. However, there are names like Netflix (NFLX), which has done hugely well.
There is very strong momentum in health care, whether it is biotech, or in my area—the high-yield health-care REITs. And certainly some of the big pharma stocks, despite the fact that you would think Obamacare would pressure them from the standpoint of pricing. Generic stocks have done well, too—the McKessons (MCK) of the world, companies like that.
So the market has been led by a quality rally that I think will probably hold itself together, based upon the fact that the leadership isn't in the purely historical sectors like technology and financials that led the market in the past.