4 Stocks Fund Manager Craig Hodges Says to Add to Your Portfolio Now

NEW YORK ( TheStreet) -- Wall Street analysts covering American Airlines (AAL - Get Report) better get their erasers ready, because the drop in fuel prices will soon have them raising their earnings estimates, said Craig Hodges, portfolio manager for the Hodges Small Cap Fund (HDPSX) . "In May the price of jet fuel was $1.90 [per gallon] and now its $1.46. That's the major component of an airlines cost so you are going to see upward revisions in earnings," said Hodges. Shares of American Airlines are down 18% thus far this year. The Hodges Small Cap Fund is up nearly 3% so far in 2015. Hodges is also bullish on rail-car and highway divider-maker Trinity Industries (TRN - Get Report). Shares of Trinity have risen slightly more than 1% year-to-date. "Trinity has had two quarters in a row where they have beaten expectations and raised estimates, and the stock has not done anything," said Hodges, adding there is big insider buying in what he calls a "very inexpensive stock," trading at

less than 7 times next year's earnings. He is also positive on shale play Matador Resources (MTDR - Get Report), which has seen its shares jump almost 12% so far in 2015 despite the lingering problems in the energy sector. "It's the best small-cap E&P management team," said Hodges. "They are incredibly efficient. Their costs have been cut in half over the last year. And their drilling time has been cut in half in the last year. And they get more and more efficient with each well they drill." Finally, Hodges is a fan of KapStone Paper and Packaging (KS - Get Report), which has seen its stock sink almost 18% so far in 2015. "A lot of people were looking for these virgin paper companies to get MLP status, and they did not, so the stocks have been hit hard," he said. "But it trades at a very low multiple in a high-barrier-to-entry business, and more and more cardboard is being used every day."

By Gregg Greenberg

Source: http://www.thestreet.com/story/13259396/1/4-stocks-fund-manager-craig-hodges-says-to-add-to-your-portfolio-now.html?kval=dontmiss