Mr. Borland: It's a pretty diverse group, and it all really depends on what end markets are firmer than others. If you were to go into several different categories within electrical equipment or diversified machinery, and look at things on an end market basis, there is cause to get more optimistic about stocks that have exposure to residential housing. The housing market seems to be firming up, although construction is still at historically low levels. But it appears to be a stable environment that will allow for good performance out of stocks that have housing exposure. This is one end market group that I'm favoring at the moment.
TWST: Are there others?
Mr. Borland: Yes, if you look at some stocks that have exposure to the general industrial economy - diversified manufacturing that serves some different end markets - there are pockets of strength. We're hearing that the paper industry is getting a little bit stronger outside of newsprint. I'm kind of staying away from stocks that have exposure to commercial construction. I do believe that eventually there will be a re-acceleration of investment in the power grid and in energy infrastructure. But I believe that those end markets near term are going to be under pressure, as we need a little more legislative clarity on exactly what the government expects in terms of investment in power sources.
Tickers included in this excerpt: AIN, AOS, GDI, GGG, MNTX, SPAR, VMI
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