This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Managers See Buys in Choppy Markets, Including Gilead, LinkedIn

Stocks in this article: KO MCD VZ UN FB LNKD

NEW YORK (TheStreet) -- Fund managers point to rich opportunity in choppy markets, even for those bearish on market direction.

With the S&P 500 flat for the year to date while the Nasdaq and Dow Jones are lower, many professional investors argue a correction is long overdue. But rather than playing a full defensive hand, they are still buying on dips in select stocks.

WATCH: More market update videos on TheStreet TV | More videos from Kori Hale

Capital Advisors managing director Channing Smith described the current earnings season as critical to market direction and is generally sticking to blue-chip names such as Unilever  (UN), Verizon (VZ), McDonalds (MCD) and Coca-Cola (KO).

"We are so overdue a correction -- the question is, what is going to be the catalyst?" he said in a phone interview. "It's almost ingrained that the market will rebound from the slightest pullback and we've whistled past various geopolitical risks."

Smith said the manager was more defensive due to pricier valuations rather than the earnings outlook or mixed economic data. But he recently added Gilead Sciences (GILD) to the manager's portfolio when the stock traded around $66.50. The company, which Smith describes as having "true earnings power," has since moved to around $69 after falling more than 17% since February as biotechs were sold off.

Federated Investors portfolio manager Lawrence Creatura says volatile equity markets present a buying opportunity. The value manager recently added to its holding of old-style tech stocks (as opposed to social media names) and also invests in some biotech companies.

"We buy into names that have already suffered and if [broad falls this year] were to get worse, we would deploy more capital," he said in a phone interview. "In moments of confusion and chaos, mispricing occurs."

Warren Financial Services chief investment officer Randy Warren sees mild pullbacks since the start of the year as healthy adjustments amid an ongoing bullmarket

He points to the buying opportunity in stocks such as Facebook (FB) but describes LinkedIn (LNKD) as a better deal for investors. "This market is giving people a chance to get into the high fliers and growth names," Warren said in a phone interview.

Russell Investments' North American strategist Doug Gordon echoes Smith's concern on market valuations. He says high equity market valuations mean the longer-term return outlook is subdued but expects mid to upper single-digit gains for shares in 2014.

"Recent market volatility indicates growing uncertainty around whether macroeconomic data is strong enough to validate equity market price and bond market yield levels," he told clients.

Gordon noted U.S. equity markets had a price to earnings ratio of more than 20 times and a price-to-book value around 2.7 times -- similar to levels last seen in late 2007.

-- By Jane Searle in New York 

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs