While still somewhat wary of the economy, Jim Oberweis says that you can find plays in the technology and consumer discretionary sectors — “the pillars of a growth portfolio” — if you know where to look.
Oberweis writes in his latest Forbes.com column that retailers such as restaurants, auto suppliers, consumer semiconductor makers, and advertising firms have been posting big year-over-year growth numbers, but that part of that is due to easy comparisons to the previous year, when the financial crisis was at its peak. “Such easy comps will come to a close by the end of this year, and we are really stumped about what will then drive continued macroeconomic growth,” he says. “Darn. Picking consumer-focused stocks with the potential to buck future headwinds will be key.”
To buck those economic headwinds, Oberweis says one area to look is “carefully selected niche-oriented small caps”. He offers a few retailers that are high on his list, as well as some tech sector picks. “Technology’s lost decade is over,” he says. While global semiconductor industry capital spending fell sharply in 2008 and 2009, he says that trend won’t last. “Capital investments can be put off for a period of time, but eventually technology companies have to keep up,” he says. “We expect that 2010 will be better for tech stocks. … In particular, bet on companies building the latest-generation semiconductors or facilitating greater network bandwidth.”