Here are top value investor Bill Nygren's favorite stock picks and how he's trading Apple now

Published Tue, Jan 21 20201:29 PM ESTUpdated Tue, Jan 21 20202:42 PM EST

In a stock market where little is cheap, longtime value investor Bill Nygren revealed what he's buying. Nygren is a portfolio manager at Oakmark Funds. His fund has outperformed the S & P 500 over the past 10 years. He was named on Morningstar's ultimate stock picker list. Ally Financial The manager said on CNBC's "Halftime Report" Tuesday that he holds a "large position" in auto financing company Ally Financial , citing its cheap valuation. "It sells at seven times earnings, below book value. It's buying back a lot of the stocks each year. In the meantime, you are getting a 2.5% yield," Nygren said. Ally Financial rallied nearly 35% in 2019, beating the broad market by about 5 percentage points. It underperformed the market in the new year, however, returning just 0.5%. GE still cheap Nygren has been a buyer of General Electric for the last few years, betting on a turnaround story. Even after a 50% climb last year, GE is still attractive, the manager said. "We still think GE is cheap," Nygren said. We think it's got a good rebound potential." GE's stock tumbled in 2017 and 2018 as the company failed to forecast a downturn in demand for its turbines, the titanic machinery that powers natural gas and coal-fired power plants. CEO Larry Culp has targeted 2020 and 2021 as years when the conglomerate's performance will show marked improvement. Energy stocks Nygren also finds value in energy stocks, which have had a tough run in the last decade. "It's hard to find a space that's more unloved than energy is," Nygren said. "We want to be with management teams that we believe are allocating capital in the shareholders' interest." Nygren said he owns EOG Resources , Concho Resources , Diamondback Energy and Apache . Energy stocks have been arguably the most hated stocks for many years as oil prices failed to reclaim their pre-crisis level of $100 a barrel thanks to the shale revolution that contributed to an oversupply. Trim Apple stake Nygren also said he has reduced his stake in Apple by a third after its epic rally last year made the stock expensive. "Apple stock doubled over the past year. Now it's priced in a pretty significant premium," Nygren said. Shares of Apple skyrocketed 86% in 2019, contributing to more than 8% of the S & P 500's total gains. The tech giant successfully offset the waning demand for its smartphones by diversifying its business into services and wearable devices.

In a stock market where little is cheap, longtime value investor Bill Nygren revealed what he's buying.

Nygren is a portfolio manager at Oakmark Funds. His fund has outperformed the S&P 500 over the past 10 years. He was named on Morningstar's ultimate stock picker list.

Ally Financial

The manager said on CNBC's "Halftime Report" Tuesday that he holds a "large position" in auto financing company Ally Financial, citing its cheap valuation.

"It sells at seven times earnings, below book value. It's buying back a lot of the stocks each year. In the meantime, you are getting a 2.5% yield," Nygren said.

Ally Financial rallied nearly 35% in 2019, beating the broad market by about 5 percentage points. It underperformed the market in the new year, however, returning just 0.5%.