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John Buckingham, Al Frank Asset Management

John Buckingham, chief investment officer with Al Frank Asset Management, says that anyone who tells you that it's easier today than it was two years ago is lying.

"It could have been a monkey throwing darts two years ago. The crappier the company, the better, in terms of returns from that point forward," Buckingham says. "Absolutely, it's much more difficult today to find value. But that does not mean there isn't value out there."

Designed for long-term-oriented investors, the Al Frank Fund ( VALUX) has total assets of about $110 million and more than 130 stock holdings. Most of the fund's allocation is devoted to electronic technology and finance as of Dec. 31. Some of the fund's top holdings are Mosaic ( MOS), Disney ( DIS) and Marathon Oil ( MRO), according to the latest fact sheet.

Since it was started in January 1998, the Al Frank Fund has had an annualized return of about 10.2%, beating the 4.2% gain of the Russell 3000, which the fund uses as a barometer of the broad market.

Buckingham has been warning investors about a pullback like the one we're seeing now. However, he says that equity valuations are not overly rich, interest rates remain extremely low and corporate profits and balance sheets are healthy. That adds up to what he says will be a "relative shallow downturn and higher prices in the not-too-distant future." In other words, stocks are not overly expensive.

Buckingham currently finds value in a handful of names, offering up Hudson City Bancorp ( HCBK) as a stock on his buy list. Hudson City is one of the worst performing constituents of the S&P 500 this year, down more than 23% after the bank disclosed it has become subject to an informal regulatory enforcement action in the form of a memorandum of understanding.

The stock sold off as Hudson City will likely force the bank to reduce its interest rate risk and reliance on wholesale borrowings, which could result in "a decrease in the size of the balance sheet and a material charge to earnings." Still, Buckingham sees a strong value opportunity in the stock.

"The fascinating thing about Hudson City is that it is a very well run company in our view," Buckingham says. They are strong from a capital ratio perspective right now. This is an entity with nearly 11 straight years of record earnings. There aren't many in the financial space that can boast that track record. This is an attractively valued stock that is now priced for what we think is significantly worse than what will happen. But you need a strong stomach to participate."

Buckingham is also a fan of World Wrestling Entertainment ( WWE) using the same thought process on looking at capital gains and income potential. Hudson City Bancorp has a dividend yield of 6.1% while WWE yields 11.7%.

"You've had the stock price fall considerably that the dividend is going to be cut," Buckingham says, referring to WWE. "They do have a very strong balance sheet with limited debt and quite a bit of cash. There is the ability to sustain the dividend for a while longer. They've had some difficulties on the cost side, but we do think ultimately that the content they have will continue to be of interest around the world and that earnings will start to grow again."

-- Written by Robert Holmes in Boston.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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