Three relatively cheap stocks are positioned to outpace the market, Chuck Bath of Diamond Hill Investments said Friday.
Bath, who was named to Morningstar's "Ultimate Stock Picker" list, said that he liked Boston Scientific, which was poised to experience growth driven by demographics.
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Particularly, its cardiac rhythm management business, would see increased demand, he said.
"Now that the core cardiology business has stabilized, growth has returned to the company, but the valuation remains inexpensive."
Secondly, Citigroup stock was still trading at a discount to tangible book value, Bath noted. "It's a new company since the financial crisis with a rebuilt balance sheet with earnings that can grow."
On CNBC's "Fast Money," Bath added that he had reduced or eliminated his portfolio's exposure to such names as Hartford but still remained positive on capital-markets players such as Citigroup, Morgan Stanley and JPMorgan, all of which were among his top 10 holdings.