Where does Wall Street see investment opportunity for the new year? It seems some stock market professionals are eyeing the cyclicals, meaning shares of companies that do well in strong economic times.
An improved U.S. economy helped cyclical stocks go on a tear in 2013, with the tanker, steel and railroad sectors ending the year up 143, 34 and 42 percent, respectively. And from recent employment numbers to housing data and a boom in natural gas production, some pros think a strengthening economy will only help take the cyclicals even higher in 2014.
(Read more: Five things that could go wrong in 2014)
Fracking, the process of procuring natural gas from the ground, has spurred an "industrial revolution" that has greatly benefited the transports, steel and rail, said Donald Broughton, a senior research analyst at Avondale Partners, on "Street Signs."
With limited pipelines to transport the fuel to other parts of the country, natgas companies rely on the railroads, which is why Broughton thinks Norfolk Southern could rise to $100 a share.
Also appearing on "Street Signs" was Urs Dur, of Clarkson Capital Markets, who thinks the U.S. will continue to be a major exporter of oil and natural gas in 2014. With limited refining capacity, though, the U.S. will need to rely on tankers to ship the fuel to refiners overseas, Dur said. He likes Scorpio Tankers and gave it a price target of $14.
In the metals sector, Macquarie Securities' Aldo Mazzaferro pointed to Nucor as a low-cost steelmaker that's been able to generate profit and meet increased demand. The stock has gained roughly 17 percent in the past 12 months, but he told "Street Signs" it still has room to run.
