Here are the undervalued stocks in this high-flying market: Winters

Stocks hit new highs again last week, with the Dow breaking another record on Friday. The Dow is up more than 4% on the year. The S&P 500 is up more than 8%, and the NASDAQ has gained more than 9% so far in 2014. But there are still some bargains out there, says David Winters, managing member of the Wintergreen Fund which has more than $2 billion in assets. “You just have to be selective about what you buy,” he says.

Keeping an eye on the North American oil boom, Winters likes Canadian Natural Resources (CNQ). Canadian Natural is an independent oil and natural gas exploration and production company based in Calgary. The company has been hailed for strong management and a balanced asset portfolio. Despite a steady drop in oil prices recently, Winters says, in our "petroleum-based society,” the stock can withstand fluctuations in price. Winters also likes the stock because he believes Canada is a “safe place” for oil.

The North American oil boom is giving a boost to the railroad industry as well, as more players need to transport more fuel. Winters says another stock he thinks is undervalued right now is Union Pacific (UNP). The stock has outperformed the market in eight of the last ten years, but Winters says it is still undervalued.  As the economy “gathers steams,” Union Pacific will continue to “roll on” he believes.

The Wintergreen Fund is long on Canadian Natural Resources and Union Pacific and Winters believes both are good buys. The Wintergreen Fund is also long in Coca-Cola (KO), a company David Winters has been very critical of after an equity and compensation plan was passed at a shareholders’ meeting with only 49% of total shareholders voting for it. Many large investors and shareholders, included Warren Buffett, sat out the vote. Winters has called the company “not straightforward and honest.”  Winters isn’t championing the stock right now either.  He says the company buys into beverage trends late and doesn't get good value.  Pointing to the recent purchase of Monster Beverage, an energy drink maker, Winters says Coca-Cola buys “fashions and fads and not solid long-term growth.”

For investors looking more globally, Winters sees Malaysian gaming company, Genting Berhad. The company has a hugely successful slot machine parlor next to the Aqueduct racetrack in Queens, New York, and is building an Asian-themed casino in Las Vegas. It already runs some of the busiest and most profitable casinos in Southeast Asia. The stock trades on Bursa Malaysia, formerly known as the Kuala Lumpur Stock Exchange.

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