Value investor Bill Nygren, who manages $16 billion as part of the Oakmark Fund, a top-rated mutual fund that's outperformed the market in the past year, says investors need to turn to underperforming health-care shares for investment opportunities.
"The market is acting as if there could be a repeal of the ACA [Affordable Care Act] with no replacement," said Nygren. "We had almost no investment in health care prior to the election. Our big position has been in financials, and post-election, the financial names have done so well and the health-care names haven't participated in the rally at all, that we've gotten our toes back in the water," he said.
In the past 12-months, the Oakmark Fund is up 27 percent compared with a return of 18 percent for the S&P 500 index.
During this exclusive interview, Nygren reveals his two favorite health-care stocks for the months ahead. PRO members have access to the content, which was originally broadcast on CNBC's "Squawk Box."