Pete Najarian reveals two of his favorite picks

Traders work on the floor of the New York Stock Exchange.
Lucas Jackson | Reuters

Pete Najarian scooped up shares of JetBlue and Under Armour for his Halftime Report Portfolio on Tuesday, following a recent drop in both names.

After a strong performance in 2015, shares of both companies have fallen more than 9 percent in the past month, presenting a buying opportunity, according to Najarian.

Here's why the options trader thinks both stocks could rally from here:

"Under Armour earnings were outstanding," said Najarian, who predicts the company has "massive potential growth online and internationally."

Last week, the sportswear apparel maker reported earnings per share of 45 cents, 10 percent higher than the same period a year ago. Similarly, revenue came in at $1.2 billion, 28 percent higher.

Read More 10 earnings stocks ready to rip or dip

His second pick, JetBlue (JBLU), is another name Najarian thinks is misunderstood by some investors.

Based on his analysis, shares of the discount airline should be trading higher, not lower, following what he believes was an upbeat earnings report.

Even though the company missed earnings per share estimates by 3 cents, the number reported was 138 percent higher than a year ago, points out Najarian. Revenue for ticker JBLU also grew by 10 percent from the same period last year.

"I love airlines, but JetBlue is my favorite," Najarian highlighted.

Najarian, considered by many to be among the best traders to appear regularly on the show, sold shares of American Express (AXP) and UPS (UPS) to make room for his two new picks. Foot Locker (FL), Citigroup (C), and Apple (AAPL) make up his other holdings.