With an optimistic outlook on the market, four beaten-down stocks offer value, James Lebenthal of Lebenthal Asset Management said Tuesday.
"The diamond in the rough is a way of saying our industry is pretty simple, right? Let's buy low and sell high," he said. "The problem is a lot of people don't want to buy stocks when they're down. They think there's something wrong with them."
Cliffs Natural Resources, he added, were oversold on the belief that things don't look good in China, Europe or the United States.
(Read more: Carl Icahn's effect on Apple stock: Traders weigh in)
"We firmly believe that the American economy is growing more than people expect," Lebenthal said. "We think that Europe is turning a corner, and we see iron ore prices growing. So, with that, we don't think Cliffs is going to have to write down resources anytime soon. And we think at 75 percent of book value, it's a great trade to be in, particularly if China picks up again."
Lebenthal said that Caterpillar had deftly managed the recession.
"They unilaterally cut the book that their dealers had on order so that they would protect the brand, so that they wouldn't do what the automakers did, which is flood the dealers' lots with inventory," he said. "And then they'd have to cut prices and hurt the brand."