Three stocks hurt by a strong U.S dollar stand to see a bounce once its rally ends, Bespoke Investment Group's Paul Hickey said Wednesday.
Since 1971, there have been 20 quarters in which the U.S. dollar has seen a drop of at least 5 percent, he said on CNBC's "Fast Money." In the quarters following, three sectors have historically rebounded: Materials, industrials and energy.
"The dollar's going to see a reversion to the mean, and I think these sectors, which are deeply oversold, are going to outperform going forward," Hickey said. "Look at energy this quarter. It's just been decimated. And at some point, these things have to bounce."
Heading into earnings, three stocks stand out to Hickey as a "buy" on dips.
"ConocoPhillips pays almost a 4 percent yield, history of raising the dividend and so that's going to cushion any weakness in oil," he said.
"In the materials, you have Dow Chemical," Hickey added. "The stock only pays about 3 percent. Higher growth rate than their peers, and the fact is that that's going to be able to support a rising dividend going forward, and following each of the three prior quarters we've seen a spike in the dollar, it's gained at least 8 percent in each of those quarters."
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Hickey's third pick is Northrop Grumman.
"High 120s is a good place to enter the stock here, and you can have good risk/reward," he said, adding that at a 2 percent yield, the stock was better than its peers.
"And if you do see any weakness on earnings, we'd definitely jump in and buy them," Hickey said.