Market experts find value amid the volatility

  • The stock market will continue to bounce up and down — and that means there are buying opportunities to be found, strategist Keith Lerner says.
  • Equities rebounded on Monday after suffering their worst weekly performance in two years.
  • Lerner likes financials and industrials.

The stock market will continue to bounce up and down — and that means there are buying opportunities to be found, strategist Keith Lerner told CNBC on Monday.

Equities rebounded on Monday after suffering their worst weekly performance in two years.

"When we've seen these sharp declines in the past, the bottoming process typically happens over weeks and months, not days. So investors should be prepared for a lot of back and forth," the chief market strategist at SunTrust Bank said in an interview with "Closing Bell."

He's not the only one warning of rocky times ahead.

"The market still needs to continue to thrash around a little bit just to find its chi," Kenny Polcari, director at O'Neil Securities, told "Closing Bell."

On Monday, the Dow Jones industrial average closed 410.37 points higher at 24,601.27. The S&P 500 gained 1.4 percent to finish at 2,656, and the Nasdaq composite advanced 1.6 percent to close at 6,981.96.

The action followed last week's sell-off that saw the Dow and the S&P both pull back 5.2 percent. Those were the worst weekly declines since January 2016. The Nasdaq composite, meanwhile, dropped 5.1 percent, marking its biggest one-week pullback since February 2016. The indexes also dipped into correction territory.

Lerner told his clients last week that the pullback was a buying opportunity. And he's using history as a guide. In the last 16 corrections, the market was up 20 percent a year later, he said.

"We think the bull market still has legs," he said.

"Valuations are now back to a 2 year low and earnings are extremely strong. In fact over the last month we've seen earnings revisions up 7 percent," he added. "After we get through this … bottoming process we ultimately think stocks will move higher."

Buying opportunities

Lerner likes financials because he said earnings are moving higher and technical trends are positive.

He also likes the industrial sector, citing strong earnings and a global economy that's on "solid footing."

In addition to the U.S. market, he sees opportunity in Japan and the emerging markets.

Trip Miller, founder and managing partner at Gullane Capital, also believes the recent pullback was a buying opportunity.

"Value investors and investors in general need to be very equipped and prepared to take advantage of these inflection points in the market," he told "Closing Bell."

He saw a rare opportunity to buy Berkshire Hathaway on its pullback and said Amazon is still a value play because of its free cash flow.

Amazon has "the opportunity to redeploy capital and explore multiple verticals that we feel like have trillions of dollars of opportunity," he said.

He also likes FedEx, which he thinks will not be affected much if Amazon launches a new delivery service.

— CNBC's Fred Imbert contributed to this report.

Disclosure: Miller, his family and his firm own Berkshire Hathaway, Amazon and FedEx.

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