AIM students: Some stocks to watch as economic gloom lifts
November 12, 2010
As gloomy as the economy might seem, 22 finance-oriented Marquette University seniors say next year will be better than many economists expect.
Business should benefit from recovering housing prices, the continuing effect of federal stimulus money and Republican election victories, said David Krause, their teacher and director of the school's Applied Investment Management Program. There's also more certainty now that the Fed has specified that it will buy back $600 billion in Treasury bonds and the election has been decided.
Such factors point Krause's students toward an emerging recovery.
If they're right, investments in cyclical company stocks - those whose fortunes rise and fall with the economy - might be about to pay off.
"The macroeconomic view of this class is that 2011 will surpass consensus estimates for the economy, and therefore they like these cyclical investments," Krause said.
The students seek out smaller companies that aren't widely followed to add to the $1.7 million portfolio they manage for Marquette's endowment, Krause said.
Mark Rutherford and Kristin Holzhauer, both Marquette seniors majoring in finance, analyzed more than 20 industrial and materials stocks to find some favorites.