Stock Picks from Janet Yellen: Next Head of the Fed?

Stock Picks from Janet Yellen: Next Head of the Fed?

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Janet Yellen is a front runner to replace Fed Chairman Ben Benanke, so we took a look at her stock holdings. 

One of most important things to happen to the US economy this summer will be President Obama's selection of a replacement for Ben Bernanke, head of the Federal Reserve. Stocks took a tumble (paywall) on the mere insinuation from Bernanke that low interest rates meant to keep lending cheap would taper off if the economy continues to improve.

The next chairman will have to tread a careful line as they guide the markets off easy money, without disrupting the fragile progress that's been made. Some have argued that the endless speculation about who Obama's pick will be has already jeopardized the delicate bi-partisanship of the Fed – threatening the stability of the economy even further. 

The front runners in the race are undeniably the current Vice Chair Janet Yellen, as well as former Secretary of the Treasury and Harvard President Lawrence Summers. The former has the support of two thirds of the Democratic Senate Caucus. The latter is one of Obama's close friends.

Already we can see a costly political drama beginning to unfold. Observers think it's almost certain to be one of the two, as no one else among potential nominees has the same kind of qualifications. But Summers, while he might be the most well-liked by Obama, is far less popular outside the administration. His work in the private sector – which includes a number of the hedge funds and investment firms he would have to regulate – might create a conflict of interest that makes Senate confirmation difficult

On the other hand, Yellen has a number of pro-administration economic stances that could make her a logical choice. She specializes in unemployment, which she publicly describes as America's primary economic problem. Obama hasn't begun vetting her yet, although that might be because she went through the process less than two years ago before the Senate confirmed her current position.

And besides, with Obama getting a lot of flack for not appointing enough women to more powerful positions in his cabinet, he may decide that it's time for a high-profile, female choice. And when The Wall Street Journal examined which economists in the Fed were actually accurate in their predictions – Yellen outpaced the entire group (paywall).

Investing ideas

In an important next step to a potential appointment, Janet Yellen released her financial holdings today. Her portfolio includes a much talked-about stamp collection (inherited from her family, most likely) and a number of mutual funds.

However, the Fed Vice Chair also holds a number of common stocks. Taken together, her assets are worth about $4 million, with yearly returns that fall in the range of $100,000 to $300,000. As if that weren't enough, she's also from Brooklyn. Not too shabby.   

Click on the interactive charts to view analyst ratings over time.

Below are some of the top stock holdings in Janet Yellen's portfolio. Do you agree with her investment choices? Use this list as a starting point for your own analysis. 

1. ConocoPhillips (COP, Earnings, Analysts, Financials): Operates as an integrated energy company worldwide. Market cap at $81.19B, most recent closing price at $66.02.

 

 

2. Pfizer Inc. (PFE, Earnings, Analysts, Financials): A biopharmaceutical company that offers prescription medicines for humans and animals worldwide. Market cap at $197.18B, most recent closing price at $28.0.

 

 

3. DIRECTV, Inc. (DTV, Earnings, Analysts, Financials): Provides digital television entertainment in the United States and Latin America. Market cap at $32.24B, most recent closing price at $57.98.

 

 

4. E. I. du Pont de Nemours and Company (DD, Earnings, Analysts, Financials): Operates as a science and technology based company worldwide. Market cap at $52.36B, most recent closing price at $56.75.

 

 

5. OfficeMax Incorporated (OMX, Earnings, Analysts, Financials): Distributes business-to-business and retail office products. Market cap at $925.33M, most recent closing price at $10.63.

 

 

6. Raytheon Co. (RTN, Earnings, Analysts, Financials): Provides electronics, mission systems integration, and other capabilities in the areas of sensing, effects, and command, control, communications, and intelligence systems, as well as mission support services in the United States and internationally. Market cap at $24.45B, most recent closing price at $75.26.

 

 

(List compiled by James Dennin. Analyst ratings sourced from Zacks Investment Research, all other financial data sourced from Finviz.)

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