This is the holiday season, and much focus is on consumer spending. But forget retail, focus on value instead, particularly in tech, health care and financial sectors. That's Dan Neiman's call.
Neiman, who manages $275 million in assets, is partner and co-portfolio manager at Neiman Funds Management, a SEC-registered investment advisor in Williamsville, New York.
ETF.com: Should folks look to retail sales and to consumer discretionary stocks this time of year for insight into the health of the economy?
Dan Neiman: A focus on retail is more typical in the summer months. Not to be a contrarian, but, rather, you should look for value right now. The main focus of our large-cap fund, for instance, is to look for dividend-paying stocks and for what we feel are undervalued or fairly valued stocks in the market.
So today, to backtrack to retail, you're not seeing a lot of value in retail stocks, but you're still seeing some great performance out of those stocks. We're happy with the retail stocks we're in, mainly Costco and Nike, and more than happy to see the positive news that Black Friday was a success, cyber Monday was a success. The retail season is in full swing.
ETF.com: When you look back at 2015, what were your best value buys this year?
Neiman: Going back to about a year to the end of October/early November of 2014, as the price of oil declined into the $40/barrel range, I felt there was an opportunity inside certain areas of the oil sector; specifically the oil refining sector. We had positions in that sector, but we added to some of our oil positions, Valero Energy and Phillips 66, and those have been some of the best-performing positions we've had in 2015.
The oil refining segment didn't see the lackluster performance of, let's say, the big oil companies in the past year. I think that's due to increased production, increased margins, and I guess the ability for companies to profit by streamlining their production and processes.
ETF.com: Do you expect this segment to continue to do well into 2016? What do you like going into 2016?
Neiman: I still like Valero, Phillips and Marathon Petroleum. We've seen a bit of a turnaround now in the big oil companies, but I think, looking at the numbers, when I run the fundamental screening for value stocks, a lot of these energy companies still show they're going to continue to be a value into 2016.