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Further Reading from MarketBeat
3 Sectors to Buy While They're Down and 1 to Walk Away FromReported by Bridget Bennett. Publication Date: 4/7/2026. 
Key Points
- American Express, KKR, and other financial stocks are trading at multi-year low valuations, and insider buying at KKR suggests the private credit panic may be overdone.
- Healthcare disruptors like Hims & Hers and software names like Figma are showing strong consumer adoption even as Wall Street sentiment remains deeply negative.
- The energy sector, despite being 2026's top performer, may be set for a short-term pullback as FOMO-driven buying creates overextended conditions.
- Special Report: Elon Musk: This Could Turn $100 into $100,000
When the S&P 500 flirted with 7,000 in January, everyone wanted in. Now, with the index 400 to 500 points lower, sentiment has flipped to fear. That disconnect between price and psychology is exactly where contrarian investors Jeff Clark of TradeSmith and Andy Swan of LikeFolio see opportunity. The setup is simple: risk tends to get priced out on the way down, not on the way up. Buying at 6,500 can offer a better risk-reward trade than buying at 7,000, even though it feels worse. Clark and Swan are targeting three beaten-down sectors where sentiment has overshot to the downside—and flagging one popular sector where FOMO may be setting a trap. Financials: Insiders Are Buying What Wall Street Is Selling
Elon Musk believes this technology could make Tesla the most valuable company in the world — yet the core infrastructure powering it is not owned by Tesla at all.
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The financial sector has been under broad pressure in 2026, dragged down by worries about private credit, interest-rate uncertainty, and recession fears. Clark sees these headlines as opportunity, not necessarily a warning sign. American Express (NYSE:AXP) is his top pick. The stock has shed roughly 20% since the start of the year, trading around $300 after hitting a 52-week high above $387 in late 2025. Full-year 2025 earnings per share came in at $15.38, up 15% year over year, and the company raised its quarterly dividend by 16%. The fundamentals haven't broken down—the multiple has simply compressed to levels not seen in years. The private credit space tells an even more dramatic story. Names like KKR (NYSE:KKR), Apollo Global Management (NYSE:APO), and Blue Owl Capital (NYSE:OWL) have fallen 25% to 40% from their highs. For weeks, major financial outlets ran the same negative headlines about private credit stress. Clark's contrarian instinct kicked in: when CNBC, Bloomberg, and Fox Business all agree on the same narrative, it's worth questioning. At KKR, both co-CEOs stepped up in February and purchased a combined 175,000 shares worth over $30 million. That's not the behavior of insiders bracing for a crisis. Swan adds Robinhood (NASDAQ:HOOD) to the watchlist. The stock ran past $100 last fall when sentiment was euphoric; now it's pulled back significantly, but LikeFolio's consumer data shows people are still flocking to the platform—opening credit cards, moving 401(k)s, and establishing crypto positions. When Wall Street hates a stock but consumers keep showing up, that's the divergence Swan looks for. Healthcare: Consumer Adoption vs. Regulatory FearHealthcare stocks have been beaten down by government spending cuts, reregulation fears, and headline-driven volatility. Clark likes Molina Healthcare (NYSE:MOH) and Oscar Health (NYSE:OSCR) as value plays in the space. The contrarian standout, however, is Hims & Hers Health (NYSE:HIMS). Swan calls it a similar setup to Robinhood—a company that ran too hot, pulled back sharply, and now trades at levels that don't reflect underlying consumer momentum. LikeFolio's data shows accelerating app downloads, growing product purchases, and strong customer sentiment. The healthcare establishment may not love that Hims exists, but consumers do. The regulatory noise is real—lawsuits, FDA scrutiny, and competitive threats from legacy pharma. Swan acknowledges the volatility but treats it as an opportunity rather than an immediate disqualifier. His analogy: Amazon (NASDAQ:AMZN) was widely criticized for years as a company that would never turn a profit. Netflix (NASDAQ:NFLX) was dismissed as a fad. Companies that attract consumer gravity tend to win over the long run, even when short-term headlines create chaos. Software: The AI Threat Is Being ExaggeratedThe software sector may be the most misunderstood trade right now. The prevailing narrative says AI will render software-as-a-service obsolete. Clark calls this the same logic that once predicted Google would become irrelevant if AI replaced search. Instead, Alphabet pivoted and became the top-performing "Magnificent Seven" stock over the past year. Clark points to the iShares Expanded Tech-Software Sector ETF (BATS:IGV), which has round-tripped to roughly $78 after rallying 13% off similar levels since his last appearance. He sees another attractive entry forming. Individual names he highlights include Microsoft (NASDAQ:MSFT), Oracle (NYSE:ORCL), ServiceNow (NYSE:NOW), and Figma (NYSE:FIG). Figma is the contrarian case study. The design platform has plunged roughly 82% from its post-IPO peak, trading around $21 versus a 52-week high near $143. Swan sees Figma as a direct beneficiary of the "vibe coding" revolution—non-developers using AI tools to build apps and digital products. Revenue grew about 40% year over year in Q4, and consumer adoption signals remain strong even as Wall Street has largely written the stock off. Swan's broader point: AI doesn't kill software. AI is software. It makes existing platforms more powerful, more useful, and more accessible. The companies that adapt will likely emerge stronger, not weaker. Energy: One Sector to Avoid Right NowHere's where the contrarian knife cuts the other way. Energy has been the best-performing sector in 2026 after being the worst in 2025. Oil and gas stocks have been on a tear, and the FOMO is palpable. Clark isn't necessarily bearish on energy over the long term; he thinks many of these stocks could be higher a year from now. But in recent weeks the sector has gotten ahead of itself. Too many investors are chasing momentum, and crowded positioning like that tends to unwind painfully. Swan agrees, but offers a tactical approach: build a watchlist now and be ready to buy the pullback. He mentions Oklo (NYSE:OKLO) as an energy-infrastructure name tied to the data-center buildout. Rather than chasing, he suggests selling puts below current prices to collect premium while waiting for a better entry. Contrarian Thinking Means Being UncomfortableThe pattern across the three bullish sectors is the same: fundamentals are holding up or improving, but sentiment has cratered. That gap between price and reality is where Clark and Swan operate. It isn't comfortable. It requires buying what everyone else is selling and avoiding what everyone else is chasing. As Clark notes, if everyone liked his ideas they'd be popular—and they probably wouldn't work. |
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