FUNDVIEW-Prudential Income Fund bullish on Microsoft, Intel

* Bullish on Microsoft, Intel

* Likes mortgage, apartment REITs

* Says Goldman not as attractive as yr ago

By Supantha Mukherjee
BANGALORE, April 23 (BestGrowthStock) – Microsoft Corp (MSFT.O: ) and
Intel Corp (INTC.O: ) are set to benefit from a corporate refresh
cycle in terms of upgrading personal computer systems, making
them good investments, a fund manager with Prudential said.

Intel’s chips power three-quarters of the world’s PCs, and
Microsoft’s Windows 7 operating system is gaining popularity.

Shaun Hong, a fund manager with Prudential Jennison Equity
Income Fund, said the technology space is attractive but there
are not many stocks with good yields.

“I love Apple Inc (Read more about Apple stock future.) (AAPL.O: ) but we don’t own Apple because
it doesn’t pay yields,” he said.

Prudential Jennison Equity Income Fund is rated five star
by fund tracker Morningstar and has about $220 million in

Hong, who manages about $3 billion for various funds, likes
B&G Foods Inc (BGS.N: ) as it is a stable company, pays a nice
dividend — that currently yields 6.6 percent — and has a lot
of opportunities for growth.

B&G, which bought the Cream of Wheat brand from Kraft Foods
Inc (KFT.N: ) in 2007, was able to increase earnings by
introducing variations and increasing distribution, Hong said.

With Kraft buying Cadbury Plc, it will sell some more
brands, so companies like B&G would benefit, he said.

In the oil and gas space, the fund owns Crescent Point
Energy Corp (CPG.TO: ) and Whiting Petroleum Corp (WLL.N: ), an
independent exploration and production company.

Crescent Point’s operations in the Bakken shale are
profitable at current oil prices, Hong said.

The fund manager is also bullish on industrial companies —
makers of machinery and transportation-related items — and
expects the sector to continue to do well.

Among the industrial companies, the fund owns stock and
notes in bus maker New Flyer Industries Inc (NFI_u.TO: ) and
Atlantia SpA (ATL.MI: ), Italy’s biggest motorway operator.

However, the fund has lowered its exposure in utility
companies, citing better opportunities in the technology and
industrial space.

The fund has outperformed the S&P 500 index (.SPX: ) for the
past three years.


Hong, whose fund’s biggest exposure is to financial
companies, said he is bullish on mortgage and apartment real
estate investment trusts.

“We are very selective on the REITs,” Hong said. He prefers
apartment REITs such as Digital Realty Trust Inc (DLR.N: ),
saying the sector would benefit as the economy recovers and
demand for apartments rise.

The fund manager, who owns mortgage REITs such as Annaly
Capital Management Inc (NLY.N: ), said when Freddie Mac (FRE.N: )
and Fannie Mae (FNM.N: ) step away from the market, mortgage
REITs could potentially buy more of the paper at better yields.

“I think there will be a little bit of volatility, but
these companies have not overstretched their balance sheet and
so their leverage ratio is okay,” Hong said

Hong said he was bullish on brokers like Goldman Sachs
Group Inc (GS.N: ) and Morgan Stanley (MS.N: ) (Read more about the money market today. ) when markets started
recovering in April and May of last year.

However, he has trimmed his holdings since these stocks
have nearly doubled in value in the past year.

“We don’t think they are as attractive now as they were a
year ago,” he said.

Growth Stocks

(Reporting by Supantha Mukherjee in Bangalore; Editing by
Unnikrishnan Nair)

FUNDVIEW-Prudential Income Fund bullish on Microsoft, Intel