NEW YORK (TheStreet) -- After the S&P 500's 10% run from the mid-October lows, it may seem like it's hard to find a bargain in the stock market. That is, unless you consult with Alan Stevens, portfolio manager for the Catalyst/Lyons Tactical Allocation Fund.
Stevens' first pick is H&R Block (HRB) . The stock has been unusually volatile this year, but 2015 should be a smoother ride for shareholders. The company has struggled to offload its banking business, which has been the culprit for much of the up-and-down price action.
The company plans to sell the unit to BofI Federal Bank (BOFI) , but has hit several regulatory snags along the way. This is simply a delay, Stevens explained, and the temporary issue will be solved sometime in 2015.
"I think the Christmas season is going to be good," he added.
Shares of Gap are essentially flat in 2014, dropping just 0.8% and are down 5.9% over the past 12 months.
Although shares may seem expensive when compared to industry peers, the stock's valuation is actually attractive because of the company's strong return on capital and return on equity, he reasoned.
Defense spending could decrease, Stevens acknowledged, but the Street has likely overestimated that decline.
-- Written by Bret Kenwell
TheStreet Ratings team rates LOCKHEED MARTIN CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate LOCKHEED MARTIN CORP (LMT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, good cash flow from operations, notable return on equity and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
You can view the full analysis from the report here: LMT Ratings Report