It seems odd that after what appears on the surface to be a true market rally, the major indexes are all just back above the break-even level. However, with two 10% corrections on the books in a six-month period, many good stocks were taken down to levels not seen in some time. One thing is for sure, the market rally is putting a firmer bid under some of the top financial companies, which in turn look like they may have turned the corner.

In a new research report, Jefferies does caution that while the volatility from the sell-offs did put some stress on the financial sector, especially the companies more skewed to equities, valuations have rebounded from multiyear lows earlier in the year. The analysts feel that the risk/reward heading into first-quarter earnings still appears to be leaning to the positive.

We found four stocks rated Buy at Jefferies that appear to have very solid upside potential.

Affiliated Managers Group

This company reported outstanding first-quarter earnings and the rest of the year looks solid as well. Affiliated Managers Group Inc. (NYSE: AMG) is a global asset management company that invests in boutique investment management firms called “affiliates.” The performance of these affiliates drives the company’s own performance, and AMG acts as a fund of funds for these entities.

The company also assists its affiliates in strategic matters, marketing, distribution, product development and operations. AMG holds equity stake in its affiliates along with the independent management, which is responsible for deployment of the funds and generating returns. The affiliates are identified based on their growth potential, with products focusing on global equities, emerging market equities and alternatives. AMG manages three distribution channels through its affiliates.

With just over 10% fixed income exposure, the company is one of the least exposed in terms of assets under management and the most levered to equity. That is fine in a potential rising interest rate environment, but it has proven a touch more volatile in the recent market sell-offs.

The Jefferies price target for the stock is $197. The Thomson/First Call consensus price target is $197.78. The stock closed on Wednesday at $170.49, up almost 4% on the day.

Invesco

This company is a financial services leader that has strong positions in both equity exchange traded funds (ETFs) and actively managed equity and debt mutual funds. Invesco Ltd. (NYSE: IVZ) looks to be very well-positioned to capitalize on inflows into both segments, as well as higher asset prices, as many on Wall Street see a continuation of the six-year bull market.

Invesco PowerShares is the boutique investment management firm that manages a family of ETFs. The company has been part of Invesco, which markets the PowerShares product, since 2006. The incredible growth and popularity of the product is why many on Wall Street remain so bullish on the stock. The Jefferies analysts see the company as one that is best positioned to compete for share given mix, product offerings and attractive relative performance.

Invesco investors receive a very rich 3.6% dividend. Jefferies has a $35 price target, while the consensus target is $36.60. The shares closed Wednesday at $31.22, also up almost 4%.

Janus Capital

This company was one of the poster boys for high-flying 1990s mutual funds, and after the tech crash of 2000 and 2001, the company lost a ton of assets. Janus Capital Group Inc. (NYSE: JNS) scored a big coup in luring famed fixed income manager Bill Gross to the company in 2014 after his less than friendly departure from the company he founded, Pimco. Gross has investing stature that continues to draw an influx of assets to the company, putting the company back in the game from a recognition standpoint.

While the initial excitement over the Gross hiring has died down, he still continues to garner substantial press and media coverage, a positive for Janus.

Janus investors are paid a 2.50% dividend. The Jefferies price objective is posted at $15. The consensus target is $14.60, but the stock closed most recently at $15.14, up more than 4% on the day.

WisdomTree Investments

This is the real up-and-comer in the ETF business, and it is carving itself out an outstanding share with many specialized ETF offerings. Wisdom Tree Investment Inc. (NASDAQ: WETF) continues to benefit from the movement towards ETFs. This is especially true with the specialized currency hedged products, with the potential for significant uptake in interest rate hedged products.

Wisdom Tree is run by Jonathan Steinberg, the son of famous Wall Street financier Saul Steinberg. He is also married to Maria Bartiromo, who became very famous on CNBC and now works for the Fox Business Network. Steinberg has a long and very distinguished ETF background, going back to the product’s infancy.

WisdomTree investors receive a 2.96% divided. The $13 Jefferies price target compares to a consensus figure of $12.61. Shares closed Wednesday at $12.03, up whopping 11% on the day.

With less exposure to fixed income products and markets, all these stocks may fare better in a rising interest rate environment. Again, the equity exposure could be a headwind should the markets turn nasty again. But financials have been out-of-favor, and now is an opportune time to look at them.

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