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Contrarian fund manager’s top 3 stock picks

Contrarian picks: UAL, LE & ENDP

Ignoring the hottest stocks around, one contrarian portfolio manager said Friday that he sees value in three stocks.

Dan Kozlowski, who oversees the Janus Contrarian Fund with $4.16 billion in assets, said that his focus was on "underfollowed, underappreciated and therefore likely undervalued if a change factor can surface."

On CNBC's "Halftime Report," he added that three factors make a stock attractive to him: "Management changes, spinoffs and industry consolidation backdrop stories."

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The Janus Contrarian Fund has a one-year return of 19.7 percent and a five-year return of 95.63 percent.

Traders on the floor of the New York Stock Exchange.
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Among its top holdings are United Airlines, Endo International and Lands' End.

United Airlines represents 6 percent of the fund's holdings.

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"United is now in the sweet spot of change that Delta was in 18 months ago," Kozlowski said. "The operations are actually working, it's clicking, the planes are full. But more importantly, there's a cost story there on United which should drive margins going forward. We think management is pushing all the right buttons."

Endo International falls into the changed-management category with a new CEO, he added.

"Operations are changing rapidly, and the Street's not fully appreciating it," Kozlowski said. "This year, Endo's underperformed the market and so we don't think it's overcooked here."

(Kozlowski didn't explain Lands' End because they ran out of time on air, but it was on his top-three idea list.)