When markets get pricey, or just appears to be in a trading range, there are many tricks that professional investors use to take advantage of the situation. We seem to be in one of those periods now, as the market printed all-time highs last summer and we have yet to get back to those levels in almost a year essentially trading sideways, with a couple of big sell-offs thrown in. This is the perfect time for the pros to whip out their arsenal of derivative tricks.

One way the pros take advantage of sideways moves is to do what is called overwriting calls. Instead of writing just the number of calls on the shares you own you may sell twice as many. The logic is you take in the call option premium and the contracts expire worthless as the underlying stock trade sideways or down.

In a new research report, UBS thinks overwriting on certain companies is a great idea now. However, the UBS analysts listed six stocks to definitely not employ the tactic on as they continue to see the possibility for near-term outperformance, despite these companies already having had a strong 2016. We picked four that looked like very solid choices now, and may be good buys as well.

Coach

This consumer discretionary stock is fighting its way back after getting annihilated last year. Coach Inc. (NYSE: COH) is a leading New York design house of modern luxury accessories and lifestyle brands. The Coach brand was established in New York City in 1941 and has a rich heritage of pairing exceptional leathers and materials with innovative design.

Coach products are sold worldwide through Coach stores, select department stores and specialty stores, and through company’s website. In 2015, Coach acquired Stuart Weitzman, a global leader in designer footwear, sold in more than 70 countries.

The stock was a favorite for years before getting absolutely hammered in 2015, but it has fought its way back. With the dollar strength fading, many analysts are more positive on the company. The company’s third-quarter earnings report showed profit growth for the first time in years, and cost cutting initiatives appear to be working as well.

Coach investors receive a solid 3.6% dividend. The Thomson/First Call consensus price target is $43, and the stock closed Wednesday at 37.38 per share.
Hess

This top mid/large cap stock pick is down a stunning 38% since highs printed in 2014. Hess Corp. (NYSE: HES) is an exploration and production company that develops, produces, purchases, transports and sells crude oil, natural gas liquids and natural gas. The company primarily operates in the United States, Denmark, Equatorial Guinea, the Joint Development Area of Malaysia/Thailand, Malaysia and Norway.

Hess is continuing a transition from an integrated oil and gas company to a predominantly exploration and production entity. The company is shifting its growth approach from high-impact exploration to a smaller, more focused exploration portfolio. Hess released a much lower capital expenditure budget for 2016, which highlights the company’s efforts for cost containment. The company said it will cut capital spending on exploration and production this year by 40% from 2015 to $2.4 billion.

Hess investors are paid a 1.74% dividend. The UBS price objective for the stock is $60, and the consensus target is $62.83. The stock closed Wednesday at $57.96.

PayPal

This company was spun-off from eBay last year. PayPal Holdings Inc. (NASDAQ: PYPL) operates as a technology platform company that enables digital and mobile payments on behalf of consumers and merchants worldwide. It enables businesses of various sizes to accept payments from merchant websites, mobile devices and applications, as well as at offline retail locations through a range of payment solutions across its payment platform, including PayPal, PayPal Credit, Venmo and Braintree products. That platform allows customers to pay and get paid, withdraw funds to their bank accounts and hold balances in their PayPal accounts in various currencies.

Some Wall Street analysts have pointed to the new acquisitions PayPal has made, like Venmo and Paydiant, that are leveragable with the combination of Paydiant. Many also think that the eBay separation is likely to help the company’s positioning with large merchants.

Recently reports circulated that Apple is looking to expand Apple Pay to in-browser on Touch ID devices. While this could be a headline risk for PayPal, most analysts feel the competitive impact will be limited as merchant adoption could prove to be a challenge.

The consensus price target is posted at $44.21. The stock closed most recently at $38.98 per share.

Yahoo

Clearly this company will be sold in some form, and anybody hedging this now would be set up for trouble. Yahoo! Inc. (NASDAQ: YHOO) provides search and display advertising services on Yahoo properties and affiliate sites worldwide. The company offers Yahoo Search, which serves as a guide for users to discover information on the internet; Yahoo Mail, which connects users to the people and content; and Yahoo Messenger, an instant messaging service that enables users to connect, communicate and share experiences in real time. It also provides digital content products, including Yahoo News, Sports, Finance and more.

Warren Buffett said recently he is backing a consortium that may have plans to buy the Yahoo platform. This consortium also includes Dan Gilbert, the founder of Quicken Loans and the owner of the Cleveland Cavaliers. Many people, including Jim Cramer, still feel that Verizon Communications is still one of the leading candidates to buy the tech giant.

The consensus price target is $41.09, but a bid could come in higher. The shares closed most recently a $37.24.

While UBS isn’t necessarily saying buy these stocks now, the implication is clear. They think there could be movement higher, and it could be sooner rather than later.

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