Nearly half of the S&P 500 is in a bear market. Here's where to hide out

Wall Street looks to close out the week with more than 43 percent of the S&P 500 in a bear market, having fallen at least 20 percent from 52-week highs.

With volatile swings taking down so many S&P 500 names, Chantico Global CEO Gina Sanchez says a flight to value stocks could be the best way to weather any more turbulence.

"We're telling our clients that they should be looking for more robust earnings. We're looking for more value names," Sanchez said on CNBC's "Trading Nation" on Thursday.

Value stocks are favored for their low valuations with an emphasis on consistent earnings and high dividend yields. The opposite approach, growth investing, focuses on future potential, and investors often pay a high premium to the rest of the market.

"If you look at the value ETF IVE and you look at the individual stocks in the IVE and the estimates that are being forecasted, it seems like there's actually tremendous upside for the value ETF even from here," added Sanchez.

The IVE value ETF is expected to post earnings growth in fiscal 2018 more than double that of a year earlier as tax cuts fatten up the bottom line. ETF components such as AT&T and Ford have already reported earnings beats.

"Value has re-established itself finally as a leader in the market, and it's been a very long time since we've seen that, and I actually think that this run has some legs," said Sanchez.

The past week's steep sell-offs have Strategic Wealth Partners President Mark Tepper seeing value in two stocks: an airline and a biotech firm.

"We like American Airlines and Celgene, and the market isn't fully appreciating their growth potential right now, so they're trading at really significant discounts," Tepper said on "Trading Nation" on Thursday. "One of the things we like to look at is PEG ratio, which is how much investors are willing to pay for a company's growth."

The PEG ratio, or price/earnings to growth ratio, provides a snapshot of a company's ability to expand measured against its valuation. The lower a PEG ratio, the more undervalued a company might be relative to its growth potential. The S&P 500 trades with a PEG ratio of 1.2 forward earnings, while American trades at 0.5 and Celgene at 0.36.

"Both of these have a significant margin of safety, and I think long-term investors are going to be very happy if they're holding these stocks," added Tepper.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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