The 10-year Treasury yield reached its highest level in three years on Thursday as investors continue to weigh the actions of the Federal Reserve. With the word "recession" being tossed around, people seem to be heading for the exits, but one investor thinks that's a mistake.
What To Know: Douglas C. Lane & Associates' Sarat Sethi noted Friday morning on CNBC's "Squawk Box" that some stocks have become too cheap to ignore, yet people are still selling and running.
"What happens in times like this is people sell their stocks quickly and then kind of say let's see how it's going to go," Sethi said. "Our view is things will slow down, but not to the point that it's gonna be as bad as what some of these stocks are reflecting."
He made the case for both Walt Disney Co (NYSE:DIS) and General Electric Co (NYSE:GE).
"These are stocks that are trading below market multiples ... these are companies that have strong cash flow and Disney even stopped their dividend just to preserve cash and now they're in growth mode," he said.
Sethi told CNBC that Disney parks ticket prices are up 40% compared to 2019 and demand remains incredibly strong. Disney is well positioned to capture the consumer demand coming from people who are ready to get out of the house and spend, which he refers to as the "revenge economy."
See Also: Disney Parks Win Another Analyst's Confidence
"Disney has kind of been put in the penalty box because, quote, now there are these recession fears, but it's different because the consumer now just wants to leave their home, they want to do other things," Sethi said.
General Electric is more of a value play, he said.
"As people are selling off the other stocks they don't really look at the GEs of the world because GE is in the middle of a big restructuring move," Sethi explained.
Ge is splitting into three completely separate businesses and each one has its own "really good" characteristics, he said.
"If you are a value investor, the catalyst is really down the road, but you kind of want to accumulate a stock like this now," Sethi said. "If the execution story of GE happens, which we think it is, and their separate lines of businesses are really good, you know, I think you're going to do well."
DIS, GE Price Action: According to data from Benzinga Pro, Disney is up 0.36% at $132.35 and GE is up 0.06% at $89.51.
Photos: courtesy of Pexels from Pixabay and GE.
