Market veteran Nancy Tengler says talk of a new bull market is premature, as she names her favorite “reliable” stocks. “I think this rally has been excellent,” Tengler, who is CEO and chief investment officer of Laffer Tengler Investments, told CNBC “Squawk Box Asia” last week. “We have been adding to risk in our portfolios since mid-June and that has worked out very well. But I don’t think we’re off and running in a new bull market,” she added. She pointed to recent data that suggests inflation may have peaked, but stressed there remains “some work to do” to meaningfully bring down inflation, which remains high compared to a year ago. There is also uncertainty surrounding the course of further interest rate hikes, given that the U.S Federal Reserve has been “somewhat unreliable in sticking to the plan.” “You shouldn’t chase this rally because we don’t know if the Fed is going to go 75 [basis points]. We don’t know if they’re going to make a policy mistake,” Tengler said. She noted the “tug of war” between conflicting data: commodity, food and energy prices have come down, for instance, but rents and other inflationary metrics remaining high.. ‘Don’t be a hero’ Tengler’s advice to investors? “Don’t be a hero.” She is shifting her portfolio to include “more reliable growers,” or companies with a proven track record of growing earnings and dividends. “We got rid of some of the more cyclical names and added to the defense names in the fall of last year … their earnings growth is reliable, and we have really tried to stick with reliable dividend growers,” she said. One stock that’s currently in her portfolio is music streaming service Spotify . Tengler acknowledged the high-profile challenges facing rival Netflix , but believes the companies have different outlooks due to their different business models. “You can keep your music on when you leave the house. It’s not a stay-at-home play. And you can listen to podcasts. They have really, really beefed up that portion of their business,” she said. Read more Tesla’s valuation doesn’t make sense until it hits this level, fund manager says Time to go all-in on tech? Top investor Paul Meeks shares his take — and reveals what he’s buying ‘Pretty compelling value’: Analyst picks his top global stocks to withstand slowing growth She is also bullish on some cloud and cybersecurity names in the tech space. “We like companies that can deliver with pricing power, and we saw in the earnings season that cloud providers have an excellent return on performance,” she said. She named Microsoft , Amazon , Oracle and Google parent Alphabet among the stocks she likes. “We also saw that cybersecurity names turned in excellent returns and will continue to do so,” she added. In the semiconductor space, she favors “broadly diversified” companies that she thinks will benefit as the sector begins to recover and have good capital allocation plans. Her top picks are Broadcom and Texas Instruments — two companies that are returning a majority of their free cash flow to shareholders through dividend increases and share buybacks.
