A $5 billion chief market strategist shares 5 post-pandemic stocks to buy now for gains as COVID-19 cases level off — and 2 big-tech winners to start cashing out of
- Crossmark Global Investments' Victoria Fernandez says she's trimming some big tech names as the economy begins to recover.
- She shared with Business Insider five stocks she's recently added to her portfolio, as she sees them positioned to rebound alongside the economy.
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As COVID-19 cases begin to level off nationwide and pharmaceutical companies race toward a vaccine, some on Wall Street are becoming skeptical about how long the relentless bull market that mega-cap tech companies have enjoyed can last.
Goldman Sachs said in a recent note that a coronavirus vaccine would prompt investors to rotate out of large-cap tech stocks and into value-oriented stocks, an assessment that Charles Schwab's stock-picking chief told Business Insider he agrees with.
Victoria Fernandez, the chief market strategist for Crossmark Global Investments, which has $5 billion in assets, is starting to count herself in this camp. In recent days she's begun to trim both Apple (AAPL) and Microsoft (MSFT), citing their extraordinary outperformance so far this year and uncertainty over how much room they have left to run.
"Our weighting in some of those larger tech, communication services names became quite overweighted, so for us it was a matter of 'okay, let's just look at our portfolio, we've had this huge run up in some of these names'," Fernandez told Business Insider on Monday.
"We still believe in these names, we still believe these are great sectors to be invested in, but perhaps it's time to take a little bit off the table and find other areas where we think there's more upside potential."
Though she noted that she doesn't see a large correction in store for large-cap tech stocks, Fernandez has indeed started looking in other areas of the market, particularly at names she believes will perform well longer-term as the economy recovers.
5 stocks to buy as the economy recovers
She shared five specific stocks she has added to her portfolio. The first is Walmart (WMT), because of its investment in ecommerce and ability to compete with Amazon going forward, she said.
"Walmart we feel like is one of the only companies that's really going to be able to keep up with Amazon when it comes to internet businesses and ecommerce. We strongly feel that that's going to be how many consumers continue to buy," Fernandez said.
"And they've got Walmart+ coming online. They've put so much more into their ecommerce infrastructure over the past couple of years."
Next, she's added McCormick (MKC), the spice and condiment maker, citing a surge of cooking at home that she thinks will continue on even after the pandemic.
"Many people think McCormick is a COVID-19 bet. It really isn't — when we look at the trends we're seeing as far as what people are doing now and what we think are going to continue to do going forward — we think cooking at home, and people eating in, is actually going to be something they do more and more of," Fernandez said.
"Obviously people are going to go to restaurants because we've been inside for so long, we want to go out and actually have someone cook us a meal. But looking longer term we think there's been a shift during COVID that's going to last longer than just this economic shutdown period," she added.
Third, Fernandez likes banks generally, but particularly JPMorgan (JPM), which has had difficulty regaining losses since February.
"We think banks are a good opportunity. It's one of those more cyclical names, but they've been beaten down so badly," she said. "When you look at all the banks, JPMorgan is one we really like — we like the management team, we like the balance sheet that they provide."
Fourth, Fernandez has given more weight to Charter Communications (CHTR), as she believes the importance of broadband will only increase going forward.
"I don't think there's an way that we go forward and broadband is not a more core part of our daily lives than it was before, so Charter Communications is a pure broadband play for us," she said.
Finally, she's added S&P Global (SPGI), a market data firm.
"You can look at areas of finance that are not necessarily banks, and find some opportunities there, so we did that with S&P Global," Fernandez said. "S&P Global is a great way to have exposure within finance that's not necessarily to a lender where you have to be concerned with rates and consumer consumption, and it's a very sticky business."
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