Two Underdog Sectors Lift the Market

 | Jan 22, 2013 | 12:13 PM EST
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We're getting these bizarre shockers in this market, segments that no one thought would do much, and instead they are dragging the market up with them.

Take the media stocks. These were supposed to be total dogs. The rates didn't seem to be going up, the ratings have been going down relative to years past, and the market was supposed to be disappointed with the progression of the quarters.

While we haven't seen any numbers yet, we have already been pleasantly surprised by some action by CBS (CBS) to unlock value with its billboard division. Plus the Super Bowl is sold out at $3.75 million per 30-second spot. And I bet, given the potential for a Harbaugh brothers hype match between two new and different teams in the bowl, they will get their money's worth. We know that Discovery Communications (DISCA) is coming on strong in its programming, and what a remarkable story that is, aided by Oprah's strong showing, courtesy liar Lance Armstrong.

So it can't be a surprise that today Goldman Sachs takes up the whole group and anoints Viacom (VIA) as its favorite, the one that had been the most challenged when it comes to ratings. I still believe that News Corp. (NWSA) is the cheapest, and I love the split-up. (We own it for Action Alerts PLUS.)

The other group that keeps powering higher? Insurance. Now, I have been saying forever that perhaps one of the steadiest hands in any business is Jay Fishman, the CEO of Travelers (TRV), who had the foresight to dodge subprime entirely and instead bought high-quality municipals with the premiums his company took in. Now that we have seen storms that have taken out capacity and allowed the company to raise premiums, the story just gets better and better. Travelers, a Dow stock, has quietly become a core position for many a mutual fund. I still believe that American International Group (AIG) represents a better value, but the run here is amazing.

What I like about these two groups is that they are rarely leaders, but they are key tells to the economy. Insurance is a mighty portion of the financial complex and can bring it up. Media advertising is a very important, very sensitive gauge of corporate spending -- it plummeted hard during the Great Recession -- and these numbers show tremendous strength.

Two unheralded areas. Two great performers. 

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