Shares of Douglas Emmett are up an impressive 22% thus far in 2016, but the west coast REIT has further room to run, said Sandy Pomeroy, portfolio manager for the Neuberger Berman Equity Income Fund . ‘Because the supply and demand characteristics of their markets are so tight we think that they have terrific net operating income growth here going forward and we think that makes it unique within the office space,” said Pomeroy. The Neuberger Berman Equity Income Fund is up 11.1% thus far in 2016, according to Morningstar. The $1.7 billion fund has returned an average of 7.3% annually over the past three years, outpacing 63% of its rivals in Morningstar’s large-cap value category. The fund sports a trailing twelve month yield of 2.5%, according to Morningstar. Pomeroy is also bullish on Qualcomm , up 24% year-to-date, saying the telecommunications equipment company is finally collecting the royalties it is owed, especially in foreign markets. Last month Qualcomm posted adjusted earnings of $1.16 a share, which was $0.09 a share higher than analysts’ expectations. Revenue of $6 billion topped forecasts of $5.8 billion. ‘Their balance sheet is super strong and they have an amazing dividend yield for the quality of company that it is,’ said Pomeroy, referring to Qualcomm’s 3.4% yield. Union Pacific is another one of Pomeroy’s top picks. The railroad has seen its stock rise 19% year-to-date, even though its volume fell 11% in the second quarter. The railroad said last month that full-year volumes are likely to fall 6% to 8% because of the soft global economy, strong U.S. dollar and weak consumer demand. ‘The more trade that takes place the better for Union Pacific,’ said Pomeroy. ‘Corn is hitting new lows and that will encourage more exports, and any recovery in manufacturing or the energy patch will be hugely beneficial to Union Pacific.’ Finally, Pomeroy is positive on International Paper , up 20% year-to-date, saying the packaging supplier has a ‘tailwind from Amazon and all the e-commerce going on’. Last week the global paper and packaging company said it had adjusted earnings of 92 cents per share in its second quarter, beating Wall Street’s consensus estimate by $0.08. International Paper posted revenue of $5.32 billion in the period, topping the Street’s estimate of $5.27 billion.
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