Strategist Jeff Saut Cautious, But Likes Certain Dividend Stocks

It's been a while since we've checked in on what market strategist Jeff Saut has had to say. Given the drastic run up in equities this year, Saut is cautious. Yet while he's cautious, he doesn't want to bet on the downside.

This is because he thinks there's a likelihood the market could just as well see a sideways consolidation. In general, Saut has long believed it's imprudent to be bearish because a turn in the economy would translate into profits exploding, inventory rebuilding, and a capital expenditure cycle, topped off with a reduction in unemployment.

Lack of Down Days in the Market

Saut is most intrigued by the fact that the market has been able to jump over a ton of hurdles (a 21% rise in the price of gas being one of them).

He writes, "the SPX has now gone 35 trading sessions in 2012 without suffering a 1% down day. There have been 12 other years since 1928 where the SPX has traded higher for 30 sessions, or more, without a 1% down day. In all but one of those occurrences the SPX was higher at year's end with a median gain of more than 15%."

Dividend Stocks Saut Likes

So while he does think this bodes well for the market, he is still a bit cautious in the near-term as the market's recent rise has felt "unnatural" to him. As such, he has recommended the following conservative dividend stocks: Abbott Labs (ABT), Aflac (AFL), Chevron (CVX), McDonald's (MCD), Norfolk Southern (NSC), and Huntington Bancshares (HBAN).

Embedded below is Jeff Saut's recent commentary:



You can download a .pdf copy here.

For more recent market commentary, yesterday we posted up Eric Sprott's February commentary on why 2012 is the year of the Central Bank, as well as Passport Capital's John Burbank saying this is a stockpicker's market.

Jeff Saut Sees Tactical Bull Market, Still Cautious Near-Term

Raymond James' Chief Investment Strategist, Jeff Saut, is out with his weekly market commentary. As we pointed out last time around, he was cautious but a buyer on dips. His thoughts remain unchanged in this regard. Hedge funds also agree as they've reduced equity exposure.

However, this time around he revealed some interesting thoughts about where he thinks we are in the overall stock market cycle. He points out that according to Dow Theory, this is a bull market. But when asked if it would be tactical or secular, he replies that, "Personally I think it is tactical within the context of the broad trading range we have been experiencing since the turn of the century."

And although he makes this distinction, he can't help but pay attention to the potential warning signs flashing at him. He notices numerous similarities between the current market and the action before the April 2010 market top. As such, he is cautious in the short-term. However, he does not see another 17% decline like last year's drop in May.

Overall, Saut is still a buyer on dips (if they ever come). He is bullish on technology and specifically likes CA (CA), Hewlett-Packard (HPQ), and NII Holdings (NIHD). Additionally in the bank sector, he suggested ideas of Iberiabank (IBKC), Peoples United Financial (PBCT), and Huntington Bancshares (HBAN).

Embedded below is Jeff Saut's latest market commentary:



You can download a .pdf copy here.

For more recent research from this shop, head to the analysts' best stock picks for 2011.