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Banks vs. Health Care—What to Buy Now: Stock Pickers

Published on MSNBC

JeeYeon Park | @JeeYeonParkCNBC

Published 11:34 AM ET Mon, 15 Nov 2010

Health care and financials are sectors that will likely see a comeback, said Alan Lancz, president of Alan B. Lancz and Associates, and Rob Morgan, chief investment strategist at Fulcrum Securities. They shared their best plays.

“Through the end of October, health care was the worst performing sector on the S&P 500and it’s because of concerns over Obama-care,” Morgan told CNBC.

“But if you look into 2011, this is a sector that’s going to grow earnings at 12.5 percent even with Obama-care.”

“It’s very cheap,” he said of the sector, “And Republicans have made dismantling Obama-care a top priority.”

In addition, Morgan said health care stocks including Bristol-Myers , Pfizer and Merck have good 4 to 5 percent yields.

Why Financials Will Rise:

“Two years ago, we got back into financials after warning about them prior to the financial crisis,” said Lancz. “We were buying JPMorgan and Goldman Sachs under book value.”

“Now, I think you can buy People’s United and Hudson City—both trading under book value and yields under 5 percent,” he explained.

Lancz Likes:

Hudson City Bancorp

People’s United Financial

H&R Block

St. Joe’s