BOSTON (MarketWatch) -- David Brown, chief market strategist for Sabrient Systems, says it's time for investors to be "very, very careful, [but] a time to be nibbling" at some great individual stocks available at a discount.
In an interview with Chuck Jaffe, MarketWatch senior columnist, Brown said that while the market's decline has boosted the value score on many securities, an appropriate reaction to current market conditions is to be nervous about just what comes out as a "buy" and to focus instead on stocks rated as a "strong buy."
Brown said the energy and materials sectors look promising, but anyone concerned about a long recession might focus instead on health care and consumer staples companies. He said that industrials and technology stocks could be on the "outside looking in" for any market rebound.
During his appearance on "Your Money with Chuck Jaffe," Brown followed through on that, labeling several energy stocks as buys, but saving his highest praise for a few strong buys, notably in shipping stocks.
Brown put the "strong buy" label on Excel Maritime Carriers -- which he said is the sixth-highest rated stock in his firm's database of 6,000 securities -- along with Frontline and LDK Solar .
Graham Corp. is also one of his favorite picks, and Brown said he considers it a strong buy, although he noted that on Sabrient's proprietary scale it is currently rated as only a buy, due to a thin following of analysts. If just one more analyst tracked the company and confirmed what appears to be a healthy financial future, Brown said the stock would earn the strong buy label.
Brown put several other stocks on the buy list, noting that they are good enough to purchase based on the Sabrient model. Those issues include BP Prudhoe Bay Royalty Trust , Arch Coal , and Regions Financial .
As for stocks to sell, Brown suggested that investors jettison James River Coal , Owens Corning and Brookfield Asset Management .
He labeled GT Solar and McDermott International as "holds," although he liked the prospects for both issues and noted that MDR was teetering on the brink of becoming a buy based on several factors that seem to be turning positive for the company.
Listen to the highlights of Your Money with Chuck Jaffe.