Don Hays' Six Picks for an Emerging Bull - Barron's

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Includes: BGC, BUCY, CSCO, DIA, DVMT, KO, NVDA, SPY
by: SA Eli Hoffmann

Barron's interviews $2 billion fund manager and stock advisor Don Hays of Hays Advisory Group. After a cautionary period in October, Hays turned 100% bullish toward the beginning of November. Bullish market indicators include his "Smart Money Index," which looks at the last hour of Dow Jones trading to gauge what institutional investors are doing (they're buying); the American Association of Individual Investors' Bullish and Bearish Survey (sentiment turned bearish after peaking on Oct. 15, a bullish signal); insider buying vs. selling is at a four-year high of 70%; the yield curve (10-year T-notes vs. 30-year T-bills) has a 1% spread, very close to its ideal of 1.25-1.5%, which normally leads to equity buying; and the correlation between 10-year T-note yield and the S&P 500 12-month forward earnings yield has stocks 42-43% undervalued, a level seen only five days over the past 28 years.

Stocks he likes:

Cisco (NASDAQ:CSCO) - based on earnings momentum, relative valuation and relative strength, there's no better pick. Cisco will be a "major beneficiary" of a technology revolution.
Coca-Cola (NYSE:KO) - they are getting their house in order and there is no better-known global name.
Bucyrus International (NASDAQ:BUCY) - coal shovel manufacturer poised to soar as energy companies continue to expand operations.
Nvidia (NASDAQ:NVDA) - still attractive despite run up. Revenues should grow 25% over the next year.
General Cable (NYSE:BGC) - they make cable for many different industries and should benefit from a global boom.
EMC (EMC) - a play on global computer storage.

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