Another housing revival play in July was his purchase of Pier 1, following the stock’s drop of over 25% from its 2014 high. The home furnishings retailer had missed earnings estimates for the same reasons Bed Bath & Beyond had—bad weather and obligations to its online platform. “Sales were disappointing, but these were relatively minor misses,” Bobrinskoy observes.

He’s also been adding to the fund’s position in Stanley Black & Decker after investors, disappointed by earnings in the company’s European operation, sold off and caused the price to drop. Bobrinskoy believes this problem, like those of the other companies, is temporary and that Stanley Black & Decker will benefit from a housing recovery.

At 14% of assets, the health-care sector also represents a large chunk of the fund. Despite investor concerns about the Affordable Care Act (ACA), Bobrinskoy believes that aging populations and advancement in medical technology will lead to robust health-care spending for many years to come. Independent sources, as well as the firm’s own research, indicates that the health-care act has led to more, not less, spending on health care.

He believes one of the beneficiaries of that spending will be Laboratory Corporation of America, which he added to the portfolio in early 2014 after investors became concerned that Medicare reimbursement rates would harm the stock. An operator of independent clinical laboratories performing health-care testing, LabCorp should be able to weather the ACA storm because it maintains a lower cost structure than in-house hospital labs and has convenient locations near hospitals. 


 

First « 1 2 3 » Next