Three Oversold Stocks Primed to Bounce Back

The S&P 500 has dropped 9% since the start of the year, but a number of stocks including Nike (NKE), Blackrock (BLK) and Constellation Brands (STZ) have the fundamentals to bounce back, said Dan Skelly, portfolio manager at Morgan Stanley Wealth Management (MS). Nike, down 12% year-to-date, is a quality growth franchise which checks Skelly’s list of investment criteria to focus on in this choppy environment. He said it demonstrates pricing power, innovation, leverage to millennial and online trends and health and wellness. He said he favors the consumer discretionary sector in particular and Nike is Morgan Stanley analyst Jay Sole’s top pick in the footwear and apparel space. 'You are going to see some marginal share losses to Under Armour (UA) and Adidas (ADDYY), but no one has the global diversified footprint of a Nike, particularly across the women’s and running businesses,' said Skelly. Skelly is also bullish on Blackrock, down 14% so far this year, saying the market selloff is creating a good opportunity to buy shares in this best-in-class franchise.