Bryn Mawr Trust’s Jeff Mills is recommending stocks involved in supply chains, cybersecurity and e-commerce because they have “staying power.”
He credits the groups’ capacity to insulate investors from the tug-of-war between growth and cyclical stocks.
Mills’ first pick focuses on companies helping supply chains.
“You’re starting to hear a narrative of things improving there, but it’s not going to fall out of the purview of a lot of companies who try to figure out how do we make things more efficient,” the firm’s chief investment officer told CNBC’s “Trading Nation” on Monday.
Mills favors PTC Inc. in the space, which focuses on productivity, maximizing revenues and reducing costs.
“They do all sorts of things in the industrial internet of things,” he said. “That’s going to be extremely important for companies throughout the world.”
But Mills acknowledges the chart is ugly. PTC is off 10% over the past month.
“This is a stock that’s pretty far off its all-time highs here,” he said.
Mills, who has $22 billion in assets under management, also likes the cybersecurity space because it has tremendous longevity.
“It’s probably one of the biggest threats not only to national defense, but corporate America,” said Mills. “There’s definitely runway there for further growth.”
His top cybersecurity play is CrowdStrike. It’s seeing a rocky month, down 15%. However, it’s up 13% so far this year.
“[It’s] growing revenues at 40% year over year. Recurring revenue growth is increasing cash flow. Metrics are getting better,” he said. “That’s a company that I really like.”
His third pick is e-commerce with an emphasis on Amazon.
“You can’t talk about thematic investing without talking about e-commerce. And, Amazon is such an interesting stock,” noted Mills. “It’s been a darling for so long. But the stock hasn’t really gone anywhere for really the entire year.”
This year, Amazon shares are up about 10%. The performance pales in comparison to 2020 when the stock soared 76%.
‘A breakout of pretty significant proportions’
Mills highlights Amazon’s massive e-commerce logistics network as a major bullish driver during the holiday season.
“The supply crunch that everyone is dealing with right now might actually help Amazon because they’re probably best positioned. They can probably get stuff to people quicker, so I think they can potentially take market share,” Mills said. “I think 2022 you see a breakout of pretty significant proportions for Amazon.”
Disclosure: Jeff Mills has long exposure to PTC Inc, CrowdStrike and Amazon.