Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Some stocks becoming attractive through sell-off

|Includes:Apple Inc. (AAPL), BIDU, CHL, DIS, EXPE, HDB, IBN, NFLX, NTES, PCLN

We saw heavy selling in the market yesterday. Such big moves create opportunity in some stocks. Buying on such weaknesses is the best strategy. When market move is indiscriminate and more momentum driven than fundamentals driven then value investors should come in and start taking small positions on the other side. Yesterday Dow was down almost 2% and S&P500 was down nearly 3%. Some concerns are about economy not adding more jobs. However, other indicators in the economy are stronger (e.g. Manufacturing, productivity and savings). What this tells me is that labor force is being more productive and for now we have a new normal in unemployment. But this is not going to derail the modest recovery that we are having. In my previous article I talked about changing immigration policy to increase demand in the economy. Unemployment might be high because of government policies also. By implementing huge unemployment benefits with new legislations government is perhaps trying to attract more people to claim the benefits. On the other hand if companies are not adding more workers then there might be two reasons behind it: 1) Companies are really not adding more production and are comfortable with current production levels in the near term 2) They are not able to hire the skilled worker here because of immigration backlash. In both cases, I think a more flexible and accommodative immigration policy will be very helpful for US economy in the long term.
But this situation means higher profits for firms whose products are still selling very well. Some names or sectors that are interesting to take long positions are thus in technology, renewable energy, entertainment and travel. These are sectors which have become an integral part of the business today and irrespective of the business conditions these are able to maintain sales momentum. Specific names to buy on weakness are Apple (NASDAQ:AAPL), Disney (NYSE:DIS), Netflix (NASDAQ:NFLX), Expedia (NASDAQ:EXPE), Priceline (NASDAQ:PCLN) and First Solar (NASDAQ:FSLR). Of course, any investors should have some exposure to stronger economies in India and China. Indian banks are very well run and have almost no exposure to big risky loans. I would suggest buying ADS of some Indian banks (IBN and HDB). I would stay away from Chinese banks due to their exposure to real estate market in China. China has seen huge growth in internet and mobile users and the best stocks to buy in China are in those sectors. Some quality names are Baidu (NASDAQ:BIDU), China mobile (NYSE:CHL) and Netease (NASDAQ:NTES).
In any market, having a balanced portfolio is the best way to be invested. Having companies that already have big and stable market for their products or have a competitive edge due to regulations or patents or innovation is the key to include them in your portfolio. And building a position by taking advantage of market weakness is the best way to insure higher returns.

Disclosure: No position in stocks mentioned in the article at present.

Stocks: AAPL, DIS, NFLX, EXPE, PCLN, IBN, HDB, BIDU, CHL, NTES