A trader works on the floor of the New York Stock Exchange shortly before the end of the day's trading in New York July 31, 2013.
Reuters/Lucas Jackson
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Although heavy selling has engulfed US stock markets over the past several weeks, that does not mean investors should exit the market completely, an AllianceBernstein quantitative research team led by Ann Larson wrote in a note sent out to clients earlier this week.
Both the Dow Jones industrial average and the S&P 500 tumbled into correction territory as selling on Thursday pushed their slides from all-time highs in excess of 10%. Additionally, the Cboe Volatility Index spiked as high as 37, signaling heightened fear in the market place.
But the "fundamentals remain strong," Larson's team wrote. "We recommend staying invested, but to the extent that investors can be opportunistic," she added, making particular note of the many companies that have a strong free cash flow yield. Larson's guide for navigating the volatile stock market centers on finding stocks that have both a strong free cash flow and aren't overcrowded.
Here are 17 names on the list:
Ebay
Markets Insider
Ticker: EBAY
Industry: Internet & Software Services
Market Cap: $46.3 billion
Free Cash Flow: 13.2%
Year-to-date Performance: 12.27%
Source: AllianceBernstein
Express Scripts
Markets Insider
Ticker: ESRX
Industry: Healthcare Providers and Services
Market Cap: $43.3 billion
Free Cash Flow: 10.7%
Year-to-date Performance: -.19%
Source: AllianceBernstein
Western Union Company
Markets Insider
Ticker: WU
Industry: IT Services
Market Cap: $9.1 billion
Free Cash Flow: 11/9%
Year-to-date Performance: 2.79%
Source: AllianceBernstein
Pulte Group
Markets Insider
Ticker: PHM
Industry: Household Durable
Market Cap: $9 billion
Free Cash Flow: 10.4%
Year-to-date Performance: $11.73
Source: AllianceBernstein
Western Digital
Markets Insider
Ticker: WDC
Industry: Technology Hardware Storage and Peripherals
