DEBORAH MARCHINI, CNN ANCHOR: Back with us now to talk about some of the stock picks in the current market environment is Alan Kral, portfolio manager at Trevor Stewart Burton & Jacobsen. And, you know, the economy is suppose to be bottoming out, yet you got all defensive picks. Explain that.</s>ALAN KRAL, PORTFOLIO MANAGER, TREVOR STEWART BURTON & JACOBSEN: Well, we're hoping the economy is bottoming out. We still haven't seen any proof yet. Admittedly, we've got the Fed, who's basically really cutting down interest rates to try and get things going. We've got a tax cut. But the evidence that the turnaround is there is not there yet. Right now, it's all hope. And, certainly, for the next four to six weeks through the earnings season, there's not going to be an awful lot of good news.</s>MARCHINI: You're buying foods, banks, and defense contractors.</s>KRAL: Absolutely. We like the stocks that have pretty solid earnings, predictable earnings going forward for the next quarter or two. Foods will always be in demand.</s>MARCHINI: Hershey?</s>KRAL: Hershey, absolutely. I mean it's a nice confectionery. People will enjoy it during the summer. They've turned around their distribution system. And their earnings are growing at a reasonable rate. In the bank area, we think that the positively-sloped yield curve that the Federal Reserve has established over the past year or so is definitely going to be a positive for the banks. They can borrow short and invest long. And with, you know, the defense, defense stocks are always going to do well -- or are certainly going to do well with the change in administration emphasis on defense going forward.</s>MARCHINI: All right, Alan Kral, please stay with us. We're going to be talking with you again a little later in the program. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Alan Kral on Stocks to Watch