As U.S. stock markets continue climbing to new highs, a record number of investors are confirming what several valuation metrics suggest about U.S. equities—they’re looking a little pricey. Yet, 58-year-old Alan Lancz, founder and president of Alan B. Lancz & Associates and disciple of famed contrarian investor Sir John Templeton, claims to have found a number of bargains, according to Barron’s.

Lancz’s Picks in an Overvalued Market

Despite recommending that investors build up their cash positions in light of the record highs being achieved by the Dow Jones Industrial Average and the S&P 500, Lancz sees buying opportunities in Fitbit Inc. (FIT), Crocs Inc. (CROX), Occidental Petroleum Corp. (OXY) and Twitter Inc. (TWTR).

The current trailing 12 month price-to-earnings (P/E) ratio for the S&P 500 is above 25 in contrast to a historical mean of around 15. The current Shiller P/E ratio is just under 30, a high that has only ever been reached two times before—just prior to the stock market crash at the end of the 1920s and subsequently during the lead up to the dotcom bubble in the late 1990s, according to data from multpl.com.

Up from 37% last month, a record 44% of fund managers believe U.S. equities are overvalued, according to a Bank of America Merrill Lynch monthly survey as reported by Bloomberg. (To read more, see: Record Number of Investors Say Market Is Overvalued).

Contrarian Reasoning

As a contrarian investor, Lancz is not afraid to exit a position and take profits when investor sentiment is high, while at the same time he keeps his eyes open for under-appreciated or oversold stocks of well-managed companies with strong cash flows and upside potential at least three or four times larger than what his analysis suggests are the downside risks, according to Barron’s. (For more, watch: What is Contrarian Investing?).

Year to date (YTD) Fitbit’s share price is down over 30%, Crocs’ is up over 7%, Occidental Petroleum’s is down more than 15% and Twitter’s is up more than 11%. While the 12-month trailing P/E ratio for all four of these companies is currently negative, indicating that they have been losing money, the fact that Lancz has been buying their shares suggests he sees brighter days ahead for these companies.