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Market Outlook: What to Shop For In a Stock Pickers' Market

Friday's selloff was a reminder to many investors that stocks may be ripe for a pullback. For that reason, some market pros think this is a good time to focus on individual stocks rather than the broader market.

"This bull market is 52 months old," Al Goldman, Chief Market Strategist at A.G. Edwards, told CNBC.com. "We have passed the 'rising tide taking all boats up.' You always have to be selective in a mature bull market."

"This is absolutely a stock picker's market," agrees Andrew Seibert, Senior Portfolio Manager at Stewart Capital. "This is not one of those years where you can throw darts at the Wall Street Journal and win. You have to do your homework and find the catalysts that will drive earnings and that's what will make you successful."

With that in mind, here are some current stock picks from money managers surveyed by CNBC.com.

  • Donald Hodges, President, Hodges Capital Management: Suggests Franklin Resources, Legg Mason, Potash Corporation, Cisco, Union Pacific, Linn Energy and Caterpillar. "These are good companies that have pricing power and they're showing good earnings," says Hodges. "To me they look cheap." The Hodges Fund owns all of the above recommended stocks in the fund. Donald Hodges owns Union Pacific and Legg Mason personally.
Symbol
Price
 
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%Change
CSCO
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LINEQ
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LM
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POT
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UNP
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  • Steve Roukis, Senior Portfolio Manager, Matrix Asset Advisors: Likes quality blue chips such as Citigroup, Bank of America, Wyeth, ConocoPhillips, Wal-Mart and American International Group. "Valuation levels at these companies are below the market, dividend yields are higher than the market and growth rates are greater than the overall market," says Roukis. Matrix Asset Advisors owns all of these recommended stocks and Roukis owns all of them personally.
Symbol
Price
 
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%Change
NOVU
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SC0Y
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COP
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WMT
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  • Andrew Seibert, Senior Portfolio Manager at Stewart Capital: Favors Barr Labs, Mercury General, Bank of America, Hartford Financial and several oil and oil services picks, including Devon Energy, Frontier Oil and Smith International. "People keep talking down oil and oil services but until we find an alternative to oil, I think these stocks are still a good place to buy--but buy them on the dips," says Seibert. Stewart Capital owns all of these recommended stocks. Seibert does not own any of the stocks personally.
Symbol
Price
 
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%Change
NOVU
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DVN
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HIG
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MCY
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  • Timothy Ghriskey, Chief Investment Officer at Solaris Asset Management: His picks include London-based Barclays Bank and Goodrich Corporation. "Within that mediocre bank is a gem in the asset management division and we like Goodrich because the aerospace market remains very strong," said Ghriskey. Solaris and Ghriskey own both stocks.
Symbol
Price
 
Change
%Change
LR
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  • Ned Riley, CEO of Riley Asset Management: Suggests investors use Friday's pullback in the market as an opportunity to buy promising sectors. He recommends putting money to work in the financials by buying the Financial Select Sector SPDR. "The financials, especially bank stocks, have shown they can grow in any kind of environment," says Riley. "I like this basket of stocks, which includes big banks as well as brokers. It has done exceptionally well over the past 12 months with low multiples and nice yields."

Phyllis Burke Goffney is a News Editor at CNBC.com. She can be reached at phyllis.goffney@nbcuni.com.