5 stocks to consider right now amid volatility and uncertainty: Portfolio manager

Market Volatility & Investment Strategy - The market has shown resilience with a V-shaped recovery, and investors should embrace volatility as it favors long-term value buyers [1] - Despite major market averages being in the black for the year, many individual stocks, especially in the Russell 2000, are still down significantly, presenting value opportunities [4] - Stock picking is expected to outperform buying indexes, offering better sleep-at-night valuations and generous dividend yields [11] Undervalued Sectors & Stocks - The energy sector, particularly Sevitas Resources, is attractive due to being hit hard, offering a big dividend yield and low PE ratio while remaining profitable [5][6] - Pharmaceutical companies like Merc are viewed as high quality, trading at a PE around 11 with a 4% dividend yield, lower than its historical valuation [6] - Whirlpool, the appliance maker, offers a yield over 7% with a PE in the 9-10 range, anticipating support from lower interest rates later in the year [8] - Target, the discount retailer, has a low valuation relative to its history and a dividend yield pushing 5% [8][9] - UPS, the package shipping company, aligns with the theme of low valuations and generous dividend yields [9] Economic Outlook & Fed Policy - Good news rate cuts are anticipated throughout the year, although immediate cuts are unlikely due to tariff uncertainties and high inflation expectations [12][13] - Historically, stocks have performed well regardless of Fed tightening or easing, rising or falling interest rates, or high or low inflation [14] - Value stocks have historically lost only a couple percent on average during recessions, with spectacular returns of 30-40% coming out of recessions [15][16] Portfolio Valuation - The portfolio's forward earnings trade at 14 times, compared to the S&P 500's 23 times forward earnings [10] - The portfolio's overall dividend yield is 250 basis points (25%) versus 130 basis points (13%) for the S&P 500 [10]