Case in point? Citigroup. "It's got well-known problems, but it seems to be addressing them," Klein says.
"I think we'll see some aggressive continuance of credit-related writedowns, as well as expense control, but it's got a very good global franchise, so we think that's a keeper."
Then there's Mattel. "There's no contention here," he concedes. "We do have a toy recall going on with Mattel, but you really wouldn't notice too much with the third quarter report. With the cash flow they've been generating and the buybacks they have, this is also, I think, very undervalued."
Drilling contractor Nabors Industries is coming off a very warm winter, with slow demand for energy, so storage levels are above normal. But Klein says, "We believe the bad news is already in the stock, and this is very interesting for a return to more normal winter weather."
Johnson & Johnson has three clear issues: "a stent-related issue; an anemia-drug related issue, as well as...drugs coming off patent."
But Klein likes the company because of its "large cash flow, about $12 billion a year, their continuing cost-reduction program, as well as a pipeline that's very extensive, the next couple of years ought to be very interesting."
Klein's most counter-intuitive pick of all might be YRC Worldwide. On Tuesday, YRC's CEO said bluntly that the shipping economy is already in recession. But Klein is undaunted. "This is now trading at what we think are recession levels...this is a very interesting opportunity."
For YRC and the others, Klein sees "a better environment over the next couple of years."