REUTERS/Kim Kyung-Hoon
A man looks at a Caterpillar truck at the China Coal and Mining Expo 2013 in Beijing October 22, 2013. Picture taken October 22, 2013. Picture taken October 22, 2013.
Kapadia's picks come from four of the market's most under-loved sectors this year: technology, energy, industrials, and financial services.
In the tech space, Kapadia says that data solutions provider Teradata hasn't seen results impacted by competition from start-ups, but is set to benefit from increased sales in Europe.
In the energy sector, Chesapeake Energy is still struggling to regain investor confidence after the messy ouster of co-founder and CEO Aubrey McClendon, but Kapadia notes that shares of the company are cheap relative to peers and the company doubled its production forecast for next year.
Industrial majors Caterpillar and Kennametal, which have been out of favor due to concerns over a slowdown in China, should also fare better going forward. Kapadia notes that Caterpillar has cleared excess inventory and seen a slowing decline in its mining business, while Kennametal - which sells specialty tools - should benefit from a pickup in orders in Asia and Europe more quickly than companies that sell more expensive items.
Capital One and T. Rowe Price are highlighted in the financial sector. Capital One, Kapadia writes, could have 20% upside if it trades at a valuation closer to regional banks in the future, while T. Rowe Price should benefit as the economy improves and people begin to save more for retirement.
In early trading, shares of Teradata and Chesapeake were down about 0.8%. Caterpillar, Kennametal, and Capital One were roughly unchanged, while T. Rowe Price shares up 0.2%.
Read the whole feature at Barrons.com.