UBS ran a display screen and located a basket of shares which might be low-cost — even when the financial system falls right into a recession. The funding financial institution took a peek inside markets to search out sectors which might be overly overwhelmed as much as low cost the danger of a downturn. Stocks stay at depressed ranges even with final month’s rally, with the S & P 500 down roughly 12% this 12 months, as traders debate rising inflation and slowing progress. “At the stock level, the large dispersion and pockets of extreme valuation discounts leaves attractive opportunities in areas where recessions risks look largely priced,” UBS strategist Keith Parker wrote in a Wednesday word. UBS found shares which might be low-cost, high quality names after adjusting for a recession state of affairs. These names have underperformed since June, regardless of rising 2023 earnings estimates, and will have roughly 35% upside in a downturn, in line with the word. The funding financial institution expects “there is room to add selective cyclical exposure in sectors which offer better risk/reward,” with a choice for shopper discretionary and vitality shares. Here are 10 picks. AutoNation seems to be low-cost even in a recession. Car retailers have maintained pricing energy amid sturdy demand, regardless of slowing shopper spending and weaker financial progress. AutoNation shares are up 3% this 12 months. Dick’s Sporting Goods is “overly priced” for a downturn. Citi not too long ago named the sports activities retailer to its focus checklist , saying it’s buying and selling at a “fraction of the valuation” warranted by increasing revenue margins. Shares are down 15% 12 months thus far. Merck might have “more room to run,” in line with Deuterium Capital’s John Ricciardi. The fund supervisor not too long ago named shares traders ought to take into account outdoors of tech. Merck is up 13% this 12 months. Toll Brothers , Stanley Black & Decker , M & T Bank , Bristol-Myers Squibb , Foot Locker , Lennar and Columbia Sportswear additionally made the checklist.