Managers See Buys in Choppy Markets, Including Gilead, LinkedIn

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.


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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.

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