Stock pick: Manager touts Ralph Lauren, Harrah's

The four-year-old AIM Multi-Sector Fund (IAMSX) is equally weighted with investments in the energy, leisure, health-care, financial and technology sectors, said Mark Greenberg, who oversees the fund's investments in leisure stocks.

"There is one fund manager for each of the sectors, (who collectively) have nearly 100 years of experience," Greenberg told CNBC's "Closing Bell" on Tuesday. "Every year, the fund is rebalanced, but the managers always try to stick to an approximate 20% weighting for each sector."

The growth-oriented fund is up 2.2% year to date and has gained 14.7% on an annualized basis over three years.

The managers' favorite energy stocks are Talisman Energy (TLM, news, msgs), National-Oilwell Varco (NOV, news, msgs). Among the leisure stocks he tracks, Greenberg prefers Polo Ralph Lauren (RL, news, msgs), News Corp (NWS, news, msgs),and Harrah's Entertainment (HET, news, msgs).

The health-care recommendations are dialysis provider DaVita (DVA, news, msgs) and drug maker Novartis (NVS, news, msgs). In the financial sector, the recommendations are Citigroup (C, news, msgs) and Marsh & McLennan (MMC, news, msgs). The tech favorites are Hewlett-Packard (HPQ, news, msgs) and electronic payment provider VeriFone Holdings (PAY, news, msgs).

Polo Ralph Lauren

The New York company designs and sells apparel, accessories, fragrances, eyewear and home furnishings. Brands include Polo, Lauren, Chaps, Rugby and Club Monaco.

The company has licensing arrangements with some 350 contract manufacturers worldwide. It also operates about 290 retail and outlet stores in the United States and another 100 outlets overseas.

It recently bought back the Polo Jeans license from Jones Apparel Group in an effort to take more control of the business, which had suffered from exposure in discount stores. It also bought Ralph Lauren Footwear from Reebok International, its global footwear licensee.

The company benefits from the perception that its brands offer consumers "affordable luxury," Greenberg said. "There's been a change in shopping habits by many: Instead of buying six sweaters, they'll buy three high-quality, premium-brand pieces."

The company on July 24 raised its first-quarter revenue outlook, citing stronger worldwide demand for its fashions. The report indicates the well-heeled shopper is still splurging and is a bright spot in a slower consumer-spending environment amid higher gasoline prices and interest rates, The Associated Press reported.

The raised guidance prompted Merrill Lynch analyst Virginia Genereux to upgrade the stock to "buy" and boost her 12-month price target to $62. "Polo remains one of the few names in apparel with organic growth and margin expansion opportunity," she wrote in a research note.

Prudential Equity analyst Lizabeth Dunn reiterated her "outperform" rating on July 24. "It is important to note that Ralph Lauren is benefiting from acquisitions and new launches, but nonetheless, the performance is outstanding particularly in this environment and given the recent sell off," she wrote in a client note.

According to Zacks, the average brokerage recommendation for Polo Ralph Lauren is moderate buy.

Polo Ralph Lauren on July 26 was rated 4 out of 10 on StockScouter.

Harrah's Entertainment

It became the world's biggest gaming company last year with the acquisition of Ceasars Entertainment.

The company is based in Las Vegas but its operations are geographically diverse. It owns, operates or manages more than 40 casinos in three counties under such names as Bally's, Caesars, Harrah's, Horseshoe and Showboat.

Its operations include casino hotels, Indian casinos and riverboat casinos.

The stock has been under pressure lately on worries about a slowdown in Las Vegas, as well as concerns about the company's capital expenditure plans, according to TheStreet.com.

Greenberg said he's unfazed by the recent weakness in Harrah's shares. "There are always times during the year when it is down, so I'm not worried about the latest downturn. … I think their poker deal to extend ESPN's coverage of the World Series of Poker through 2010 is a great move. Poker is all the rage."

Other potential catalysts for the stock include the company's plans to open two new hotels in Atlantic City, N.J., this year; it's also developing master plans to guide development at both Atlantic City and Las Vegas; and it will reopen a storm-damaged casino in Biloxi, Miss.

Morgan Stanley reiterated its "overweight" rating July 12, saying concerns that have weighted on the stock are "misperceived." "The stock has underperformed the group since peaking in May and now is one of the most attractive names we cover," wrote analysts Celeste Mellet Brown and Christopher Metli.

According to Zacks, the average brokerage recommendation for Harrah's Entertainment is moderate buy.

Harrah's Entertainment on July 26 was rated 6 out of 10 on StockScouter

VeriFone Holdings

The San Jose, Calif., company provides technology that enables electronic payment transactions and value-added services at the point of sale. Customers include government agencies and companies in the hospitality, retail, and health care markets.

"They are the leader in their business of handling the electronic payment transactions by credit cards, ATM cards (and) prepaid cards," Greenberg said. "It's hard for others to enter this market, so I see VeriFone staying dominant as we see growth in point-of-sales transactions."

The largest investor and top VeriFone executives sold large blocks of shares in the company as the stock traded near 52-week highs and regulators sought more information about a planned takeover of a rival, according to Cardline, a daily e-newsletter covering credit and debit news. VeriFone's shares have tripled since its initial public offering in May 2005. Insiders sold more than 12 million shares over the past three months.

According to Zacks, the average brokerage recommendation for VeriFone Holdings is strong buy.

VeriFone Holdings on July 26 was rated 6 out of 10 on StockScouter.