If ever there was a “5 stock” piece that investors might want to read, this is probably it. Barron’s has published an article naming five stocks which will do well as rates rise. Interestingly, these choices are not based on macroeconomics (e.g. REITS do poorly as rates rise), but based on the actual underlying financial obligations of the companies, with pension obligations being the key factor. The five names that come out when one looks at the situation that way are companies which investors will be very familiar with: GM, Ford, Xerox, American Airlines, and General Electric. The piece summarizes the benefits this way, saying “In general, as the health of pension plans improve, so should balance sheets, cash flows, and earnings due to lower pension contributions and costs”.
FINSUM: These look like very good calls because they are not obvious, but the benefits will be in time. Very interesting to see GE on there given its struggles lately.