Scott Black: Bullish on Brokers and Smallcap Ultra Clean Holdings

Includes: BSC, GS, LEH, MS, UCTT
by: Mick Weinstein

During last week's 'Barron's Art of Successful Investing' Conference in New York, Scott Black, Founder and President of Delphi Management, said he believes the market is fully valued at these levels of about a 16 P/E for the S&P 500, and that he expects the Fed to remain benign on interest rates with no cuts in the immediate future.

His fund is long four brokerage stocks -- Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), Lehman Bros. (LEH) and Bear Stearns (NYSE:BSC) -- for a range of reasons, including Far East activity and ongoing prime brokerage growth. Click on the video below for details.

Black also shared a smallcap tech pick -- Ultra Clean Holdings (NASDAQ:UCTT):

Most tech stocks sell 16 multiples and up... This is a tiny little company in Menlo Park, they'll do about $400 million in sales, they basically do the assembly of gas induction chambers for Applied Materials, Lam Research and Novellus... it trades at a 9 P/E, 18% return on equity on virtually no debt, and earnings are accelerating as well as the operating margins.

To view a video of the Barron's interview with Mr. Black, click below:


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