Why this CIO is bullish on two of the most unloved stocks: Boeing and GE

Although impeachment proceedings have engulfed Washington, D.C. in recent weeks, the political jockeying has been largely ignored by investors. Meanwhile, the coronavirus outbreak has similarly left markets largely unscathed as stocks continue to hover near their all-time highs.

Kramer Capital Research CIO Hilary Kramer considers these events, among others, to be ‘non-issues’ in a market intent on continuing its climb.

Kramer joined The Final Round on Thursday to discuss what risks, if any, could send markets down, and why Boeing (BA) and General Electric (GE) are among her top stock picks.

Why Boeing and General Electric are buys in this market

Boeing and GE are among the most unloved stocks in the market. Over the past two years, the stocks are down 9% and 22%, respectively, during a period where the S&P 500 is up 19%.

Despite their struggles in recent months and years, Kramer believes that both stocks are buys in this market.

“I'm looking for companies that could go up,” explains Kramer. “GE, I didn't think the news was all that strong today. Boeing, they can come back. They had the most number of cancelations that they've ever had in their history for one quarter. But at the end of the day, they will come out ahead on this.”

A Boeing 737 MAX sits outside the hangar during a media tour of the Boeing 737 MAX at the Boeing plant in Renton, Washington December 8, 2015. REUTERS/Matt Mills McKnight

“Boeing is a good company,” Kramer continues. “It's been a good company. I'd rather be in a 737 than an Airbus any day of the week; just ask any pilot you know. It's like the difference between a Yugo and being in the best F-150 Ford pickup there is out there.”

‘There’s no fear’ in the markets right now

Kramer argues that there’s a “groupthink” in the investment community that is driving markets higher.

“If you just look at the market, it's telling us that it's not worried. It's just buying across the board,” explains Kramer. “It's not 1999. It's not just internet companies going through the roof. In 1999, Lockheed Martin was a $17 stock, and now it's a $425 stock and add up 54% on the year. Blackstone is up 105% on the year. [It's] just incredible how diversified it is.”

Although Kramer is bullish on the market’s overall performance, she maintains some reservations about how stocks could behave as we approach the 2020 election.

“[As] we get closer to election time, if it looks like we're going more towards a left versus a Trump, then we're going to see some real shakiness in the market,” explains Kramer. “Those tax breaks that corporations have enjoyed, and being able to repatriate money abroad, and the cuts – that has been very, very important to companies.”

Olivia Balsamo is a producer for Yahoo Finance.

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