Things sure have changed.
Some of the dream stocks of 2013 have had cold water doused on them in 2014. Names like Netflix and Twitter have lost a respective 11 and 38 percent this year.
What is starting to work is value names.
Gerry Paul, who oversees $13 billion in value equities as chief investment officer of US Value Equities, says investors would be best served looking for value in this market segment, with three in particular.
1. Genworth Financial
Paul likes Genworth because it trades at a price-to-book multiple of 0.60. Financial companies are generally priced to its book value because they hold a lot of liquid assets.
"It's going through a transformation of its business," said Paul. "Its principle business is in long-term care insurance, which has been under a lot of pressure because it was historically underpriced. Most companies have left the market. Genworth is still there and is aggressively repricing its book of business. We think the market is not appreciating what that book is really worth."
In April 2010, Hewlett-Packard was trading close to $54 per share. By November 2012, it was below $12 per share. Since then, it has nearly tripled, but the road back up was rocky. Paul likes the company's management and what it does for shareholders.
"What we see in Hewlett-Packard is very attractively priced cash flow," said Paul. "What we see is a new management team that's focused on pushing down costs, blocking and tackling, and improving day-to-day operations. [Hewlett-Packard] is trading at double-digit free-cash-flow yield. And they're starting to get really religious about returning that capital to shareholders in the form of dividends and share repurchases. So I like good free cash flow yields in this market."
GameStop has had a terrible 2014: The video game retailer is down 20 percent. Yet Paul is bullish on the stock's long-term outlook and earnings potential.
"I like it because it's trading under $40 and I think you're going to see it earn over $6 in the next couple of years," said Paul. "It's down because we're going through a transition in video game consoles which has historically been associated with weak sales of games."
Paul is confident that the hardcore gaming market, especially males age 15-24, will spend a lot of money at GameStop.
Management "is very shareholder friendly," said Paul, and "aggressively buys stock back and return in the form of dividends."
To see the full interview with Gerry Paul on Genworth Finanical, Hewlett-Packard and GameStop watch the video above.
Disclosure: Paul is a manager of AB Value Fund, which owns Genworth Financial, Hewlett-Packard, and GameStop.