James A. Abate is the Chief Investment Officer of Centre Asset Management. Mr. Abate sees some real upside in stocks that have exposure to consumer discretionary spending. In his exclusive interview with the Wall Street Transcript, Mr. Abate details his investing methodology and explains his top picks:
“The majority of our positions at this point are names that are going to be in what we consider to be the capital growth area, with the ability to wisely put money to work by continuing to grow their businesses. Our main concentration at this point is in the technology sector — examples being NVIDIA (NASDAQ:NVDA), Adobe (NASDAQ:ADBE), Activision Blizzard (NASDAQ:ATVI), KLA-Tencor (NASDAQ:KLAC) — and consumer discretionary — examples being Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX) — sectors.”
Currently, Centre Asset is off-loading health care stocks: “We have significantly reduced our exposure to other traditional growth areas, namely in the health care and consumer staples sectors, since the summer of 2016 as we have seen the majority of companies not able to continue to meet the very high expectations that investors are paying for them…the broad-based implementation of “zero-based budgeting” having run its course after being a significant positive influence to wealth creation for the past few years.”
Centre Asset is also actively pursuing one contrarian pick:
“For example, we’ve seen Ralph Lauren’s (NYSE:RL) stock price collapse from almost $190 down to the low $70s here, where we have just recently gotten involved in a very contrarian manner. This hopefully low point in the stock price has happened when the company, for the first time since the early part of 2013, has seen a positive inflection in its net profit margin and ability to take down inventories and undertaking a massive restructuring to turn things around and rightsize themselves for a smaller brick-and-mortar retail distribution channel.”
To get more of Mr. Abate’s top picks, read the entire exclusive interview at the Wall Street Transcript.
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