Katz: eBay Has Fixed Itself

Courtney Dobrow: I wanted to ask about another top holding, eBay. Their acquisition record is a little bit mixed. PayPal has been a huge success. Skype, I regard as a mistake by the company.

The stock has pretty much doubled since the market bottom. What do you think about the business? What do you think it's worth?

David Katz: We think eBay has fixed themselves. We think the marketplace business is doing well. It's going to do better in a recovering economy.

We think Skype, which was a great business but not a great investment for eBay, has a value to somebody. We think them selling the business for $3 billion is a good thing. It puts more cash on their balance sheet.

We think eBay's earnings are going to rise substantially. Right now, we think they have at least $1.40, $1.50 [per share] of earnings power in a normal time, and we think that's worth the high $20s to low $30s.

So while the stock has had a great run, we think that there's more to come from it. We think technology and aggregate is going to be a good place to be. eBay should be a strong company over the next six to 12 months as well.