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Tech Value Plays

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    Chris Konstantinos of RiverFront Investments on where to put your money in today's market.

  • Duration 4:43
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And welcome back markets are bouncing back after earlier losses tech sector leading the way and our next guest sees the sector as a value play joining us.

With a few portfolio boosting -- -- Chris Constantin -- of -- riverfront investment group insert.

I understand that your your long term view your pro risk and that's good because you have a daughter going to college in about seventeen years if I'm correct.

-- why do you think -- and I and I'm curious.

You do think we're gonna see a three to 5% pullback in the market short term lines that.

A short.

Basically.

You know our our tactical rules -- other -- -- -- short term rules are we barred from not friends of ours and Ned Davis Research which is.

Don't fight the Fed don't fight the trend -- where the crowded extremes in his first two tenants we think carefully and investors' favor right now.

But that third one were a little bit concerned about just in the very near term which is we think that that market a little bit overbought here at the a lot of the investments and -- sentiment polls that we read.

Are registering optimistic extremes I should note however that while that tends to be bad from a very near term perspective for the market.

From a 36 month forward view.

Actually good thing for markets that investors willing to get optimistic again so.

We we view you know very short term hiccup in the road but for throughout 2012 we think the markets can grind higher from.

And I believe this within this last hour S&P 500 is trading its highest level since 2008.

You like dividend stocks let's not like what's not to like about the right -- that talk about some of the stocks in the tech sector that you like.

But -- but this seems to be the play that you advise people to go for.

Go for dividend of the yield there.

Yes but maybe the Nuance that we put on it is we -- -- -- -- dividend growth and potential for further -- dividend growth and we do just on out right yield.

In fact some of the traditional places that investors get yield.

Places like -- Staples utilities we actually view is somewhat overvalued.

We're increasingly find finding exciting.

Yield growth opportunities in places like tech surprisingly a lot of investors I talked to -- surprised.

When I say -- -- the truth is -- some of the higher yielding stocks as -- some of the best dividend growth for finding is in.

In places like tech certain places certain areas of health care certain areas the consumer discretionary and and even energy.

Chris let's talk about ten -- is that the apple shareholder meeting and I know that you like apple and yet they don't pay a dividend tell me about your desire to continue liking apple because there are some analysts are saying now the time -- it's not.

Sure I think that there's a couple really interesting things about apple first thing is.

You know if we judge just by how many times apple was mentioned in the media we would think it's probably over -- institutionally but actually the reverse is true on some recent research I read.

I'm actually suggests that you know apple such a huge part of institutional index is now like the Russell 1000 it's actually bigger than some other sectors.

Like utilities and the average institutional investor the average mutual fund for instance actually underweight apple relative.

To these waiting so I actually think that there is room.

44.

For in institutional investors.

There -- more apple.

Chris yes a very quickly -- apple is 70% of their revenue was the iPad the iPod and iPhone can they sustain that and I still wanna get together to fix.

Sure I think they can and the -- the really interesting thing is.

It isn't just the story about those products -- where everyone focuses on but we're watching the core Macintosh that the Mac computers.

Gaining a ton of traction not a -- -- -- debt -- sold in the last quarter was the number.

Correct just a couple years ago the Mac was like two or 3% of global PC sales.

And now it's a much bigger percentage -- and is gaining traction even in the enterprise space which we think to be the next.

Big growth potential for Kodak company.

Long -- but everyone's going to the cloud on -- -- short but I wanna getting your your call for Microsoft.

Big news for Microsoft in Spain at the mobile ruled convention.

Congress rather why do you like Microsoft they used to be -- -- Well it's one of the reasons we like -- on the stock in any huge disappointment for over a decade and.

Lot of people gave up on Microsoft and and because of that we think the stock is embedding.

Long term growth is just way too pessimistic.

And the other thing we really like about him is that we think management is slowly certainly get religion around giving capital back to shareholders.

If you look at a dividend yield it's now two and a half percent and in growing that.

Well it well into the double digits for the last five and ten year periods.

And so we think that there's just too much pessimism out there right now on on Microsoft.

Chris Constantine -- I appreciate you joining us I'm sorry we don't have time to talk about ConocoPhillips -- that it's another one that you like they've been streamlining and selling off some of assets but.

We'll keep it the tech sector for today has that.

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