Apple Inc (NASDAQ:AAPL), International Business Machines Corp (NYSE:IBM) and Wells Fargo & Co (NYSE:WFC) are currently having a very good period in the stock market and they are preferred by many Analysts and investors. Brian Rogers, Chairman of T. Rowe Price Group Inc (NASDAQ:TROW) talked to CNBC’s Kayla Tausche at Allen and Company Media Technology conference on companies to invest and settlement issues that happened recently.
Rogers said that there is a lot of value in couple of category stock. He categorizes the first type as high quality dividend yield. Companies like International Business Machines Corp (NYSE:IBM), Royal Dutch Shell Plc (NYSE:RDS.A) and General Electric Company (NYSE:GE) which provide yield in range of 3+% comes under the first category. Second category of companies which he feels have laggard turnarounds, which is currently not doing very well in the market, but there is huge underlying value with them. Companies like Newmont Mining Corp (NYSE:NEM) and Mattel, Inc. (NASDAQ:MAT) comes under this second category.
“I look for high quality yield plays and turnarounds. That’s two places to look in the equity market”, He said.
Rogers thinks that International Business Machines Corp (NYSE:IBM) is one of the cheapest stock with a good dividend and buyback history. He feels that Virginia Rometty, CEO of IBM is doing a lot of stuffs to get the company back on track. He thinks that there is a huge value in IBM stock on a risk return perspective.
On Apple Inc (NASDAQ:AAPL), he said that when he started investing in the company, which was year and a half back, it was a 10 P/E multi stock company which provided 3+% dividend yield and a classic value opportunity company.
“Company has rebounded fairly well. Investor sentiment has begun to improve and at some point it will be more fully valued, we will think about moving on,” he added on Apple Company.
Wells Fargo & Co (NYSE:WFC) remains one of the favorite companies to Rogers. There were some opinions on the street that people are not very comfortable about the Wells Fargo’s expenses and the fact that companies growth is beginning on the loan side. Rogers said that financial is growing at pace of the economy and he accepts that rate of growth is fairly moderate. He also said that he is very confident about Wells Fargo & Co (NYSE:WFC) managing and controlling their expenses in long term. He feels that only concern might be the underlying loan activity and almost all financial institutes are seeing slow growth in terms of loan activity.
Citigroup Inc. (NYSE:C) is very close to paying a $7 billion as mortgage settlement fine, JP Morgan Chase & Co (NYSE:JPM) had paid a $13 billion as fine last year and another settlement is expected by Bayway Mortgage group. Many investors were disappointed with the fact that these are actually shareholders money. Rogers also accepts that the money paid as fines are shareholders money and was particularly disappointed at fine on JP Morgan. He feels that JP Morgan has done everything possible during financial crisis to keep the system stay alive and finally ended up paying $13 billion of their shareholders money. But he was relieved at the fact that Citigroup Inc. (NYSE:C) and Bayway may be one of last companies to do this mortgage settlement and it is coming to an end. He thinks that the deficit is shrinking temporarily because of all these fines paid.
Rogers is stepping down as Portfolio Manager for Equity Income fund after his 30th anniversary in October 2015. He will still continue as Chairman and CEO of T. Rowe Price Group Inc (NASDAQ:TROW).
“Be a long term optimist, on the back of my 35 years in the business, things always seems troubled but things always seemed to work out and you have to have faith in the economy and in our country over the long term,” he shared a piece of advice to investors.
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