5 Contrarian Stock Picks With Strong Growth Outlooks and Share Buybacks

NEW YORK (TheStreet) -- The stock market is repeatedly scoring new highs this year in the face of high valuations, geopolitical risks and worries over the Federal Reserve lifting interest rates sooner than expected. There is no shortage of talking heads telling investors to sell for fear the end is near. CNN Money's Fear & Greed Index shows investors are neutral -- neither fearful or greedy -- suggesting investors are still far from feeling the euphoria typically seen at market tops. 

The stock market may be overpriced based on the cyclically adjusted-price-earnings (CAPE), price-to-sales, stock market capitalization-to-GDP and other ratios. But you can still find stocks trading at bargain prices with good prospects for sales and earnings growth driven by new product offerings, store openings and backlogs. On top of that they are repurchasing shares. Buybacks support share prices by creating a floor for demand while increasing earnings per share as profits are divided among fewer shares. Here's a look at five stocks that meet all these coveted criteria.

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1. General Electric (GE) is trading at slightly lower price-to-earnings and price-to-book value ratio compared with both its sector and the S&P 500  (SPY) while paying an attractive 3.3% dividend yield that's larger than both its peers' and the market. It has about $11.6 billion remaining in its share buyback program.

General Electric stands to benefit from an improving credit market and global demand for infrastructure development. The diversified manufacturers makes everything from light bulbs to home appliances to jet engines and power-generating equipment. The conglomerate's backlog climbed to $246 billion at the end of the second quarter from $223 billion in year-ago period owing to strong growth in its equipment and service businesses. In June, General Electric made a $16.9 billion deal to acquire the power and grid division of Alstom, which is expected to close at the end of this year.

GE is the second-largest stock holding in hedge fund titan Ray Dalio's portfolio behind Apple  (AAPL) . The Bridgewater Associates founder boosted his stake in General Electric more than 800% in the second quarter, according to GuruFocus.com. Warren Buffett and George Soros added to their General Electric positions in the fourth quarter while David Dreman added in the first quarter, according to GuruFocus.com.

2. GNC (GNC)  trades at only 13.6 times earnings vs. 28 for its sector and 18 for the S&P 500. In the first half of this year, it opened 179 new stores in the U.S. and overseas including 17 store-within-a store locations at Rite Aid (RAD) . In addition, it acquired nine stores in Ireland in April. Earnings and sales are expected to be flat this year compared with 2013. But 2015 earnings are expected to rise 12% with 5% sales growth, according to analysts polled by Thomson Reuters Knowledge. It also pays a 1.7% dividend.

The nutritional supplements retailer announced in mid-August that it plans to buy back $500 million of its shares over the next two years. GNC Chairman Michael Hines, bought 30,000 shares on Aug. 18, increasing his stake to 37,118 shares. Just two weeks before that CEO Michael Archbold bought 175,000 shares. Insiders sell for many reasons but buy when they believe shares are undervalued and that the company's outlook is improving.

Read More: 10 Stocks George Soros Is Buying

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