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Alternative Investments to Gain from Housing Recovery

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    Hennessy Funds CIO Neil Hennessy on the stocks to boost investors’ portfolios.

  • Duration 4:08
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Looking here on count on the we like to highlight top performing funds for you in deep into what they're making.

As far as bets what are they for what are they against him today.

We're looking up -- the -- of the Hennessy cornerstone mid cap thirty fund a lot of you might own.

Funds that this is one you need to look at because it is up nearly 20% over the past year the man who -- that are good but you haven't -- Hennessy funds see 01 portfolio manager.

You cornerstone midcap fund of course has the -- -- which have really been in the sweet spot their record highs they're doing very very well so the question becomes.

What are your metrics for choosing the stock to go into this fund because the funds doing pretty darn well.

Will businesses -- forming a driven so essentially look for companies that have a market cap between one and ten billion dollars.

Our price to sales ratio one point five or less so we're just not gonna pay more than a dollar fifty -- dollar in sales we -- earnings higher than in previous years.

And then that companies that are still standing we want to see if they have positive price appreciation relative strength over three and six months.

Everybody thirty companies with the best relative strength.

Over twelve month period -- dollar amounts -- for year.

OK Peter what's the market cap Max minimum one billion to ten billion so you're right in the middle across -- -- middle which is good because of you wanna grow top line sales as a large company.

This in the sweet spot.

Here's your sector allocation the biggest chunk of the yellow part that's consumer discretionary about 30% -- you've got energy financials health care's important.

Let's talk specifically about some of the names that you absolutely love right now when I was in Davos Jamie Dimon of JPMorgan flat out said.

Housing is quote totally back a massive totally he said yes and -- are picking not the home builders but.

Some of the names -- people are sort of beyond -- bought the house now I've decorating the house.

Why I think you have to look back -- over the last 45 years there's been a lot of deferred maintenance done in the housing market nobody's put money in the paint or carpet or new cabinet.

Because a house was going down in value so why would you want to put money in there.

And so now you start to look at say.

Mohawk in in you're talking about even if the home builders do really well so was -- 'cause -- carpet -- So will the existing home.

It's and the vast 'cause of the world master golf courses in cabinetry Mohawk as you -- up 54%.

Though here -- more to run.

But do you do you gotta look at.

What's happening -- -- you get Bob prices sales ratio there about one point two C Payne of dollar to mourning for dollar revenue.

-- pay up to a dollar fifty for dollar revenue so there's plenty room still left on on say moloch.

Here's Masco for the three month chart aside from a few blips is absolutely beautiful another one up 42%.

It is Sarah is Sarah dividend on this want.

You know I can't remember what right now but I know that the prices sales is about point five so -- -- fifty cents per dollar revenue also like names where there -- a potential for the dividend what a Mohawk for example there there's not -- that you might get it and here once for example you believe will happen dividend that moves higher at some point.

Well -- parents about three dollars and fifty cents a share and if you look at what all companies are doing their initiating dividends are raising dividends Tupperware last.

The last week -- different 70% but.

Here's a company I can initiated given -- pier one pays twenty sense that you welcome nickel that's a 25% increase.

30% to the upside on this one and finally and this is the real stunner here when you look at Whirlpool.

People have put off buying those big ticket items.

Not anymore look at this stock chart you see that Whirlpool has done unbelievable beautifully over the past year up 57%.

It still has a very low price to sales ratio so -- point five in.

And you look in the world -- once again deferred maintenance people will spend 80900 dollars a thousand dollars now.

On a new washer dryer refrigerator or whatever that they put -- purchases off.

The last 45 here.

The portfolio of fund is called the cornerstone -- mid cap fund HF MDX run by have a seat mr.

Hennessy and hear his top picks.

In the little house we've -- that with some of the beautiful thing congratulations thank you see if it continues.

-- feel great to see you thanks to you Neil Hennessy we.

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