Investors have been punished this year for using the "buy the dip" strategy that worked so well for much of the past decade.

Most stocks outside the scorching-hot energy sector have been weighed down by a litany of concerns, including four-decade-high inflation, tighter financial conditions, the Russia-Ukraine war, and an increasingly popular sentiment that another recession is coming. Those fears have sent US stocks, as measured by the S&P 500, down over 12% year-to-date.

But despite how painful it's been to stay invested as risks mount and volatility rises, some market experts believe it would be unwise to completely abandon stocks now.

"From a strategy perspective, we've found that risk/reward is attractive when this much recession risk is priced (>80pctl)," wrote Keith Parker, the head of US and global equity strategy at UBS, in a late May note.

Parker wrote in a subsequent note detailing his investing strategy that US stocks now appear to be oversold by four percentage points. His model indicates that fair value for the S&P 500 is 4,300, which is about the midpoint between where the index entered the year and its 2022 low.

As for the economy, UBS's strategy head wrote that worries about a recession are "at odds with fundamentals" because key leading indicators haven't peaked yet.

"We see a disconnect in equity markets between recessionary fears and the current fundamental backdrop," Parker wrote in a May 31 note. "Our logit model suggests equities are pricing a ~30% chance of a recession by year-end (>85pctl), despite 'hard data' models pointing closer to 0%."

Parker isn't alone in his view that the US will avoid a recession. Tom Kennedy, the chief investment strategist for JPMorgan Private Bank, recently told Insider that markets are underestimating the Federal Reserve's ability to rein in inflation without causing a downturn.

If that bullish thesis is correct, then economically sensitive stocks should outperform their defensive peers, Parker wrote. Cyclicals have lagged defensives by 10 percentage points in the past three months, the strategist wrote, which he said was the biggest difference between the two since 2012.

Stocks in the following industries have fared worse than expected and may bounce back, Parker wrote: consumer durables & apparel, transportation, media & entertainment, and technology hardware.

But Parker isn't the only one at UBS with investing ideas. Last month, the firm surveyed all 38 of its North America equity analysts to get their "highest conviction calls" for the remainder of 2022.

The UBS analysts shared 44 investing ideas — 43 of which were stocks to buy. One analyst recommended selling shares of consumer goods conglomerate 3M (MMM).

Each buy-rated name is perceived by the analysts to have more upside than downside in what may continue to be a choppy market, but investors must still be wary of downside risk.

"As we move later cycle, avoiding the biggest underperformers becomes even more important for portfolio returns," Parker wrote in the late May note that accompanied the stock picks.

Below are the 43 buy-rated stocks that UBS analysts are most confident about, along with the ticker, market capitalization, industry, price target, and thesis for each.

Thesis: "We believe the market is not currently appreciating the significant shift in DuPont's exposure and growth following a series of strategic actions. With the planned divestment of the majority of the Mobility segment, and planned acquisition of Rogers in 2022, new DuPont will be significantly different than old DuPont. Pro forma, DuPont will have ~40% sales exposure to electronic materials markets, which are higher margin and higher growth."

Thesis: "With steel prices still holding up well-above historical mid-cycle US$500-600/t levels, Americas steel producers remain very cash generative at US$200-300 EBITDA/ton vs US$100/t mid-cycle. We assess steel prices should find support around pre-Russia/Ukraine levels of US$900-1,000/st into 2H22 (vs US$1,300/st spot), due to elevated iron ore/met coal prices, still well-above historical levels."

Thesis: "We believe BERY can deliver ~1-1.5% annual volume growth (BERY targeting ~2% in all segments medium term). Investments in HHS (post-mask/wipe headwinds) & EM to drive higher growth, and Berry has already shifted its consumer business to growth with innovation, new project wins & CPI synergies."

Thesis: "Our Buy rating on GPK reflects our view that the boxboard market is underappreciated following years of stagnant growth and limited pricing power. The market environment is changing as 2025 sustainability targets set up a multi-year path to boxboard volume growth and paper packaging gains share across a variety of end markets. GPK is a boxboard pure play with strong exposure to both North American and European markets."

Industry: Aerospace & Defense Electronics

Thesis: "While we believe the company has a ways to go in rebuilding investor trust, it realistically is only a matter of when and not if the company is able to clear its two biggest hurdles. The restart of 787 deliveries has moved from an open-ended exploration of issues on the plane to a final review of an agreed approach to manufacturing compliance — clearing that review is the bridge to FCF positivity. 737 deliveries should continue to ramp but lack of ability to deliver to China is a problem but again one that is part political and part short-term demand driven. Once the aircraft is clear to fly/be delivered in China, BA will have a clearer view on production rate increases."

Industry: Airfreight & Surface Transportation

Thesis: "We believe SAIA has an attractive algorithm for multi-year EPS growth based on expansion of its terminal network, focus on service performance, and consistent pricing which supports margin expansion. We expect SAIA's medium-term growth outlook to remain positive despite the signs of a likely downturn in freight activity over the next several quarters. In our view, SAIA stock already reflects the expectation of a significant freight downturn considering SAIA stock is off 45% in 2022 (vs the S&P 500 -18%)."

Industry: Business, Education & Professional Services

Thesis: "We are maintaining our Buy rating for MSCI, as 1) we expect robust growth amid several long-term growth opportunities, including ESG & Climate, Fixed Income, and Private Assets, among others; 2) we view MSCI as the purest play on demand for ESG data and solutions, which should be accelerating, and 3) our updated estimates put us 3% above the Street on FY23E EPS."

Industry: Electrical Equipment & Multi-Industry

Thesis: "As a market leader in connectivity & sensor solutions, TE Industrial carries exposure to automation, which we view to be an attractive market accelerated by Covid. We think automation will take share of global capex wallets behind the heightened focus on supply chain resiliency. Our US Reshoring thesis has further strengthened as supply-chain disruption is proving difficult to shake and freight rates remain elevated, localizing supply chains is a tailwind for automation as replacing higher cost labor increases the ROI & expands the TAM [total addressable market]."

Industry: Machinery, Engineering & Construction

Thesis: "After a COVID-induced reset, all three of CAT's segments are in an upcycle. While some of the factors related to rising commodity prices have to do more with the sluggishness of ramping supply in the wake of the pandemic than with the strength of demand, industrial demand is strong and should support elevated commodity prices and investment. While there are likely to be individual markets that are weak (e.g. construction in China), we see supportive environments in construction, mining, and energy."

Thesis: "We've maintained ALK as our top pick in US airlines in 2022 given they navigated Covid particularly well by avoiding shareholder dilution and shoring up their balance sheet/improving net debt. They're not immune from some of the operational issues the industry is dealing with (and felt the impact from pilot shortages/cancellations acutely in May), but when these subside, we expect strategic initiatives to shine and differentiate them from peers."

Industry: Beverage, Household & Personal Care Products

Thesis: "The bull case for Spectrum Brands has always been predicated on unlocking value in an underappreciated asset, and while stock performance from here will hinge on deal timing, we believe the HHI divestiture and potential strategic actions for HPC are meaningful steps towards unlocking value. Beyond the transactions, SPB has fully embraced the concept behind the Staples Flywheel, which is to cut costs and reinvest to drive stronger organic revenue growth long-term. We believe these strategic actions and sustained improvement in underlying fundamentals are not currently reflected in valuation."

Thesis: "While investors are skeptical NOMD can execute multiple rounds of price this year to help ease the inflationary pressure, we are confident for three reasons. First, NOMD executed price increases in four of the past five years, including 4% in 2019 when inflation was +MSD [mid-single-digits]. Second, PL is already the dominant market share leader in NOMD's categories and has remained steady over the past decade. Our analysis indicates NOMD's share has very little correlation with its price gaps to PL. Third, PL manufacturers in Europe typically have +HSD [high-single-digit] operating margins. Given the inflationary environment, we believe PL will need to take multiple rounds of price as well or will face significant profit pressure."

Thesis: "WMT has done a lot right in recent years. It's improved execution & successfully changed the narrative of its story from that of a mature brick & mortar retailer to being a viable #2 in ecomm. We believe it's now approaching an inflection point, where it can leverage technology to reduce expenses and speed up its productivity loop. It's reached a critical mass in online grocery , which should give it an edge as consumers become more open to that channel post COVID-19."

Thesis: "We believe HLT will outperform MAR because of better unit growth, and we also see a catalyst for the lodging space with the return of business travel, as the incremental improvement in occupancy recovery now is likely to be made up of more high-margin business travel vs leisure."

Industry: Homebuilders & Building Products

Thesis: "We model OC generating over $1bn of free cash flow/yr through 2024 and buying back ~13% of its shares. In addition, we model $310mm of cumulative M&A though 2024, ~$400mm of dividends, $1.5bn of capex and $1.1bn of debt repayment. Our forecasts represent a 14% FCF yield based on our 2023e, which compares very favorably to peers."

Thesis: "We believe Mattel is well-positioned to outperform what is likely to be flat to declining toy retail trends this year, after two years of double-digit % growth. We see broad-based momentum at Mattel that is probably multiyear, not entirely dependent on what the industry does near-term and more tied to expanded shelf space, stronger retailer partnerships (494k+ retail doors), concrete steps to scale and cross-sell evergreen brands with stronger content footing and a richer entertainment slate through 2023."

Thesis: "We believe MCD maintains among the better paths to sss [same-store sales] outperformance in 2022 and 2023 and beyond, supported by multiple initiatives, defensive positioning in a pressured consumer spending environment, and ongoing investments. We view elevated US sss strength as sustainable and continue to see an international sales recovery ahead, w/ market share gains likely in most key markets globally. We view risk/reward as attractive as continued comp momentum should support +HSD [high-single-digit] EPS and strong FCF growth, while downside appears limited (defensive characteristics, div. yield, peer valuations)."

Industry: Retailing/Broadlines & Hardlines

Thesis: "We believe the risk-reward on ORLY's shares are favorable at these levels. Sector trends should hold up fine in a recessionary backdrop while it also has solid pricing power should inflation persist for longer. The sector should also benefit as more workers return to offices and vehicle miles driven increases. Further, we also see ORLY's ability to gain share in any backdrop, and we believe risks of increased promos are unlikely to materialize. ORLY is also trading at 16x NTM P/E, which is at a meaningful discount to its 3-yr average of 21x."

Thesis: "ONON has two important characteristics enabling it to have high margin potential: 1) it is a premium, high-priced brand which plans to compete on innovation, rather than price, and 2) it will be a direct-to-consumer, ecommerce led business. We also think its expansion to apparel will be accretive to margins over time. We note premium athletic wear brands with these qualities, such as Nike and Lululemon, have similar margin outlooks."

Thesis: "GNRC provides a relatively uniquely diversified opportunity to which investors can gain exposure to the rapidly growing solar + storage market w/ underlying earnings stability from GNRC's core business of recession resilient home standby power. Dominant market share (~80%) and strong demand for home stand-by power have insulated already high residential product margins from inflationary cost pressures."

Thesis: "Sempra is levered to natural gas prices through its renewables in Mexico and higher LNG prices through its backlog of projects. Upcoming rate cases can price in some inflation and the ROE adjustment mechanisms, and attrition revenues provide some protection."

Industry: Midstream & Natural Gas

Thesis: "LNG's growth platform will be underpinned by its traits including: 1) first mover advantage within an oversupplied NA [North American] natgas market but an undersupplied global market 2) >30% market share of NA LNG exports, 3) long-term contracts underpinning ~85-90% of capacity, 4) two LNG export locations on the USGC [US Gulf Coast], and 4) direct access to 3 of the premier shale basins in the world (Permian, Marcellus/ Utica, and Haynesville). We believe the market does not appreciate how liquefaction capacity is financed at the project level."

Thesis: "The best positioned banks are those least tied to macro volatility , clearly a very difficult characteristic to find among commercial banks, which makes BPOP stand out. Unlike past periods where much of the investment story was clouded by the Commonwealth's bankruptcy status, bankruptcy lifted in January and loan growth pushed higher in Q1. Capital return is at record levels and the 2023 buyback authorization should be even larger with bankruptcy resolved. This is a difficult time for bank stocks to outperform, which may need to fund higher reserves and battle deposit runoff. BPOP should outperform with low provision rates and a massive reserve just as mainland banks bolster reserves and wrestle with deposit runoff."

Thesis: "We believe BAC is better positioned relative to peers, should the economic environment deteriorate. Keep in mind, the 'knock' on the stock pre-pandemic was that BAC is not growing fast enough and/ or not taking enough risk, given fresh scar tissue from the post-Global Financial Crisis litigation issues. As a result, we expect credit quality at BAC during a recession to outperform peer averages, adjusted for loan mix."

Industry: Brokers, Asset Managers & Exchanges

Thesis: "AMP has evolved from an insurance provider to a wealth and asset management firm over the past decade. Wealth and asset management earnings have represented 80-95% of total for the past five years, which suggests AMP is no longer an insurance company. Moreover, mgmt. sold off its fixed annuity business last June and is marketing the remaining insurance underwriting business, and if that freed up capital is deployed to grow AWM, we believe it strengthens the case for multiple expansion."

Industry: Brokers, Asset Managers & Exchanges

Thesis: "We continue to be constructive on NDAQ as 1) we expect non-transaction organic growth to remain robust despite recent market turmoil; 2) it appears that US cash equities and equity options strength is sustainable for now; and 3) we see potential for multiple expansion longer term, particularly as NDAQ's organic growth outlook and non-transaction revenue mix rivals higher-multiple information services peers, which average close to 30x on FY23."

Thesis: "We upgraded shares of ALL to Buy from Neutral in January 2022 based on our view that ALL will begin to see underlying margin improvement in 2H22 that should drive upward EPS estimate revisions and multiple expansion. We believe rate increases in ALL's personal auto business will begin to offset loss trend as frequency comps get easier in 2Q22 and rate starts to catch up to elevated severity trends."

Thesis: "We believe RGA's shares continue to overly reflect mortality risk for COVID and we view RGA's discount as unwarranted given the improved underwriting commentary in 1Q22 and multiple potential sources of near-term earnings upside. Further, RGA's underlying earnings profile (adj. for COVID) has remained strong throughout the pandemic, which we believe should lead to a re-rating in shares once excess mortality related to COVID subsides. Moreover, once excess mortality from COVID ends, we could see a period of favorable mortality, further boosting earnings and ROE."

Industry: Real Estate Investment Trusts

Thesis: "We are positive on EQR due to its significant (76%) coastal urban market footprint that we believe is poised to outperform the already rebounded suburban markets. With every one of its markets seeing higher rental rates compared to 2019 levels, we believe EQR can see that momentum continue well past the peak Spring leasing season. As employees have been returning to the office, we expect that catalyst to push apartment demand higher. A strong job market with rising wages, especially for EQR's high income ($160k) renter demographic, enables EQR to push rents without facing significant affordability issues."

Thesis: "We are positive on VRTX given 1) peer-leading growth, 2) significant cash flow generation 3) a solid pipeline of multiple novel therapies, including a relatively de-risked gene therapy/editing platform, and 4) an event path with numerous pipeline readouts over the next 12 months. At current levels, the market is giving VRTX no credit for its pipeline."

Industry: Health Care Facilities & Managed Care

Thesis: "We have high conviction in the company's ability to deliver on its 10% EBITDA growth target and model $170 mn contribution to growth from bed additions, JV partnerships, de novo treatment centers (CTCs), and tuck-in M&A through 2025. We conservatively model lower revenue from potential near-term Medicaid pressure (1.5% pricing vs. company's view of 2-3%) and still see a path to 10%+ EBITDA growth driven by balanced organic and inorganic sources."

Industry: Health Care Technology & Distribution

Thesis: "We remain encouraged by consistent backlog numbers, expectations around conversions and most importantly, March exit rates. Further, LH needed to incur material staffing expenses in the quarter in Central Lab to service business that eventually came through. It may take a quarter or so of beating segment numbers to re-instill confidence in the CRO [contract research organization], but at 13x NTM EPS (vs. 10-year average of 14x), we believe current valuation isn't fully crediting a potentially improving base diagnostics business and the underlying CRO asset."

Industry: Life Science & Diagnostic Tools

Thesis: "We expect the stock to outperform the market. Conviction in IQV's data-driven patient recruitment strategy plus a favorable industry backdrop support our above-consensus estimates, which together with multiple expansion can enable ~45% stock appreciation in the next 12 months."

Industry: Cable, Satellite & Telecom Services

Thesis: "After ceding ground to AT&T in recent quarters, we see upside to subscriber/revenue performance, driven by: (1) T-Mobile's 2-3 year head start with 5G (on pace to reach 260M POPs with high-speed 5G by YE22 vs. Verizon's 175M target and AT&T's 75M), (2) higher penetration in new growth areas (rural, Enterprise, etc.); and (3) lower churn in the legacy Sprint base."

Thesis: "As the pure-play public tower operator, we believe the company is best positioned for the upcoming 5G investment cycle. We estimate U.S. wireless capex will reach record highs in the coming years, driving accelerating organic tower revenue growth while supporting ~11% AFFO/sh and 20%+ dividend growth. All tower operators should benefit, but ~80% of SBAC's business relates to U.S. towers, the highest exposure amongst its peer group."

Industry: Internet/Mid- & Small-Cap

Thesis: "We see BKNG as one of our top picks across Internet and within the travel space specifically. Not only do we believe that BKNG can benefit from the continued travel recovery, but we see increased focus on direct traffic and Connected Trip as potential tailwinds. We are also bullish on incremental EPS and EBITDA benefits from payments, which we think can expand take rates. BKNG, in our view, is also potentially more insulated from inflation than other names in our coverage."

Industry: Internet/Mid- & Small-Cap

Thesis: "MYTE's target of high- net-worth individuals building wardrobes are typically more resilient to economic cycles, which should allow MYTE to deliver better than feared growth. We recognise the current uncertainty on macro, as well as MYTE's small market cap and limited float, yet with the shares trading at ~21x 2023E EPS, versus ~17x for the S&P 500 despite significantly faster growth, we continue to believe the investment case is compelling."

Industry: IT Hardware & Electronics Manufacturing

Thesis: "Improving interest for 5G phones in China suggests iPhone shipments should likely remain solid in FY22 despite supply chain disruptions. We forecast roughly 235/235 million phones sold in FY22 and FY23 respectively while Services and Wearables should grow materially above iPhone revenue growth over the next several years driven by increasing penetration rates of the iPhone installed base across by both Service offerings and ancillary products like the Watch and AirPods."

Thesis: "We believe FOX is better positioned than peers from both an affiliate and advertising standpoint given its sports and news focus, the programming most insulated from pressures on the Pay TV ecosystem. A more measured approach in DTC [direct-to-consumer] gives us stronger visibility into EBITDA/FCF generation for FOX than peers and we see upside to street EBITDA expectations for F23 (UBSe ~20% growth to $3.6B+ vs. street's $3.4-3.5B), fueled by a ramping renewal cycle, stronger midterm political spending, Super Bowl, FIFA World Cup, reset NFL costs and lower DTC dilution."

Industry: Payments, Processors & IT Services

Thesis: "We believe valuation does not fully price in Visa's five-year growth potential, and overstate threats from network disintermediaries and regulation. With a large cash-to-card conversion opportunity, imminent improvement in cross-border travel spend, ongoing strength in Visa's value-added services, and greater penetration of B2B, B2C and P2P payment volumes, over the next five years we expect Visa will generate revenue and EPS growth in the low-teens and high-teens, respectively."

Industry: Semiconductors & Semiconductor Capital

Thesis: "MU's overall demand environment remains constructive, even amid some chop in smartphones and, to a lesser degree, PCs in large part due to strong content tailwinds in server this year. We remain structural bulls on the DRAM [dynamic random-access memory] side of MU's business. A slowing cost curve in a product with a consolidated base of supply that is a big and growing cost input for huge hyperscale customers should translate into more stable CFs and expanding margins."

Thesis: "Azure will be a prime beneficiary of greater cloud adoption in 2022 and given a rocky economic backdrop, MSFT represents a steady growth story with strong margin/EPS control. At 23x EV / CY23E FCF, shares don't strike us as being extended given the risk/reward profile."

Industry: Software/Mid- & Small-Cap

Thesis: "Our Buy rating is predicated on the view that cybersecurity budgets are not only resilient, but expanding, and that CRWD's cloud-native, SaaS security platform is well-positioned to address secular trends including security analytics modernization, cloud adoption, and AIops. A track record of strong execution, an expanding core end-market, and underappreciated profitability keep us constructive on shares. While the current macro environment could continue to punish high valuation names, we see less fundamental risk in cybersecurity, have growing conviction in CRWD's platform expansion, and expect high quality names like CRWD to better weather economic challenges."