Top mid-cap fund manager Jonathan Simon says he’s adding some risk to his portfolio heading into 2012, and is high on some regional banking stocks. Simon tells CNBC that he is particularly concerned with a company’s free cash flow, and how it uses that cash. “They have to have a very disciplined approach to capital allocation — maybe making acquisitions, paying down debt, paying a dividend or a stock buyback,” he says. “That’s the key.” He says he’s cautiously adding some more economically sensitive stocks to his portfolio, and he mentions some that are on his radar right now, including M&T Bank.
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