Japanese industrial giant Hitachi <6501.T> could double its earnings in the next couple of years, veteran investor Michael Katz told Barron's.
The founder and managing partner of Glenrock Asset Management also favors U.S. aerospace company Gencorp
But he is negative about toymaker Hasbro
Asked about some of Glenrock's positions, Katz said investor concerns about Gencorp in the face of defense spending cuts were misplaced.
As a rocket engine maker, Gencorp is relatively insulated from Defense Department cuts, Barron's quoted him as saying.
Katz said the company has annual sales of $900 million and an order backlog that has risen 11 percent from last year to $1.5 billion.
He said Gencorp's stock could rise as high as $15 from its current $4.78.
Katz also said he was positive about Hitachi, which makes everything from bullet trains to power plants and elevators.
Following a restructuring by Hitachi's new president last year, he said there was potential for further restructuring.
We think earnings can easily double over the next couple of years and then keep on growing from there.
Katz told Barron's he was also positive about Renault, Florida land developer St Joe
But he was negative about Hasbro because the toymaker is facing a problematic cultural shift as children play less with games and puzzles and more with electronic video games.
Earnings results in 2011 have been disappointing so far and we think estimates for 2012 remain too high.
Katz said he valued Hasbro in the mid-20's, putting a 10 times multiple on his estimate of $2.60 a share on 2012 estimates. Hasbro was trading at $34.26 last week.
(Reporting by Steve James; Editing by Diane Craft)