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Market Cap £148.55bn
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Position in Universe 52nd / 7151

Reuters Insider - Extract dividends and value from oil stocks - fund manager

Wed 23rd March, 2016 8:14pm
Click the following link to watch video:                       
 Source:             Thomson Reuters                                   
 Description:        Oil stocks offer good value and dividends, says   
                     Dan Neiman of Neiman Funds Management. He has been 
                     adding Chevron, ExxonMobil, and Valero to his     
(To access all exclusive Reuters Insider programming visit: 
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Transcript (May be auto-generated)

                 Stocks edging lower as oil prices head down. Let's take a closer look at the 
markets from Los Angeles where we're joined by Dan Neiman. He's a Partner in 
Neiman Funds Management. He's also a Portfolio Manager. Dan, welcome. Stocks, 
they're trading in a rather narrow range today. What's behind the hesitancy of 
investors? Well, I think there're a lot of things behind hesitancy today but we 
have to look at a bigger picture, at least. I mean we're more managing our large
cap value fund. You know we're looking at a lot of volatility, a lot of 
uncertainty in the markets certainly yesterday with what happened in Belgium and
multiple things across not only in our country but across the world, really I 
think provides more volatility than we're seeing in today's action. Alright. 
What seems to be pressuring the markets today - oil prices down again - will 
investors keep turning to oil in the absence of big earnings news or earnings 
data, economic data? Well, you know, one of the things I've looked at, at least 
in the past say year and a half is actually oil companies that continue to 
produce oil and continue to turn a profit. And I've actually started to put more
money into oil back a year and a half ago, put some money into Valero and 
Phillips, and lately have rolled some of our investments back into the Exxon and
Chevrons. But why so? I just feel that oil companies continue to make money and 
what we're looking for is, first of all, good value. So when oil companies are 
beat up, obviously we want to look for companies that are undervalued. And I'm 
also looking for companies that continue to pay a dividend or increase their 
dividend year after year. And those companies that I mentioned all have done 
that year after year. And while earnings may not be as robust as in the past, I 
still think they're making money and there's a good chance to buy in at bottoms 
in some of those names. Now, Dan, your large cap fund, it own shares of Nike. 
That company's been on a tear - quarterly profit and sales surged but the 
revenue missed expectations. And today, it's Dow's leading decliner and it's up 
23% over the last 12 months. Do you think Nike's run is sustainable? Well, I 
don't know if it's totally sustainable in the long run. But I do like Nike. I'd 
been Nike today if I wasn't in nice shoes with you here today. But I think, you 
know, I've been a big fan of Nike for a long, long time, and I think that today 
would be a good buying opportunity, down 3% or 4% last time I checked. And I 
really feel that revenues maybe sluggish but you know they're still earning 
quite a bit. And I think the revenue stream may be got hurt by the stronger 
Dollar. And I think that over the long haul, Nike is going to continue to 
produce and also be the biggest player in its segment. Alright. Now, existing 
home sales, they fell sharply and they fell across all the regions. And today, 
we got new home sales figures – they rebounded in February but only in the 
west. Looking at your large cap fund, you don't seem to own homebuilder stocks. 
Do you see the housing market losing momentum? You know what I see is the 
continued low interest rates, especially in the 10-year, helping boost. 
Especially here in the west, I know rates are so low that if you could get into 
a property or get into a second home, for example, you're going to see real low 
interest rates and lock in a nice, you know, 30-year fixed mortgage. We don't 
own homebuilders but we do own plenty of companies that own real estate. And I 
think that diversification across the board, you know companies like Costco, 
other companies that are out there that own real estate, we have those and while
we're not direct into say a Home Depot or a Lowe's, we are spread across the 
board, diversified- you know, we're diversified across multiple segments there. 
And quickly, Dan, we talked about stocks that you're buying, any stocks that 
you're selling right now? Well, you know, I just actually got out of Marathon 
because of some trouble there, Marathon Petroleum. But really what we're trying 
to do in our fund is build a core holding position. We've got about 35 stocks in
the fund today and again, buying fundamentally strong companies. So until a 
company's earnings continue to report bad, you know, say quarterly after 
quarterly will we eventually dump it. Okay. Thanks a lot for joining. Thanks, 
Dan. Thank you. Our thanks to Dan Neiman of Neiman Funds Management. I'm Fred 
Katayama, and this is Reuters
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