'Out of Favor' Companies You'll Love

Risks to Consider: Donnelly and Pitney Bowes can only prosper if the printing/mailing industry remains viable for the foreseeable future. In addition, both of these companies have made investments that ratchet up credit risk. Moody's recently cut Donnelly's credit rating from "Ba1" to "Ba2." S&P rates Pitney Bowes' corporate debt at "BBB+." I am keeping a close watch on both companies for signs of eroding credit quality.

Action to Take: My top pick overall is STM since I think this company is likely to rebound sooner rather than later because of its relationship with Samsung, which recently replaced Apple(AAPL) as the top smartphone manufacturer, with 44.5 million units shipped in the first quarter of the year. I also like Donnelly and Pitney Bowes for their generous yields supported by strong cash flow.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.