Gundlach: High-Yield Stocks Not so Attractive

NEW YORK (TheStreet) -- Investors still running into so-called "safe" high-yielding stocks may want to reconsider, says Patrick Gundlach, portfolio manager for the BMO Small-Cap Growth Fund( MRSCX ) . Gundlach says that trade has gotten awfully crowded and there are better values to be had in small-cap names like insurance software provider Ebix(EBIX) .

"Their customer base has certainly been getting a lot stronger over the past couple quarters since the financial meltdown, and while Ebix is not a household name, this company has been one of the strongest growth companies over the last decade. It's had strong double digit growth, year in and year out and we think there's a lot of room left for it to run," says Gundlach.

First You Screw Up, Then Lie and Finally Die

The $593 million fund, which garners 4 stars from Morningstar, has returned an average of 28.6% annually over the past 3 years, outpacing 87% of its Morningstar rivals in the small-cap growth category.