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John Reese is CEO of Validea.com and Validea Capital, and portfolio manager for the Omega Consensus funds. Globe Investor has a distribution agreement with Validea.ca, a premium Canadian stock screen service. Try it.

For a long time now, many investors have been waiting for the Great Rotation, the shift of money from bonds – into which investors piled during the Great Recession and its uncertain aftermath – back to stocks. Last year, fund flows indicated that at long last the Great Rotation might be beginning.

But in 2014, what has followed might better be described as the Not-So-Great-Rotation. It involved a shift out of higher-growth, high-momentum areas like technology and biotech and into bigger, safer, dividend-paying stocks. Over the past three months, the three top-performing sectors in the U.S. market have been energy, utilities, and consumer defensive, according to Morningstar, while the bottom two have been technology and consumer cyclical.

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To a degree, the rotation has been a necessary, even positive occurrence, as some of the high-momentum stocks had gotten too frothy. But the not-so-great part of the shift is that a number of reasonably priced stocks in the tech, biotech, and other high-growth areas have also been hit hard because of guilt by association.

I'm not one to play the sector/industry timing game. Recently I used my Guru Strategies models – which pick stocks based on the approaches of Warren Buffett and other highly successful investors – to search the new high-momentum sectors for stocks that remain attractively valued and financially sound. Here are a few of those that made the grade. (Keep in mind that when using my quantitative strategies, I invest in broader baskets of stocks like these to diversify away stock-specific risk.)

Kellogg Co. (K)

There's been speculation that Mr. Buffett's Berkshire Hathaway might be interested in buying this Michigan-based food giant, which counts among its well-known brands and products the likes of Rice Krispies, Eggo, and Pringles. My Buffett-inspired model thinks it would be wise to consider doing so, as Kellogg has both the big brand names and the lengthy track record Mr. Buffett tends to like. The firm ($24-billion U.S. market cap) has upped earnings per share in all but one year of the past decade; has averaged a stellar 43.2 per cent return on equity over the past 10 years; and trades at a very reasonable 7.7 per cent earnings yield.

Integrys Energy Group (TEG)

This Chicago-based diversified energy holding company is primarily in the natural gas and electric utility businesses. The $4.6-billion-market-cap firm has grown EPS at an 18 per cent pace over the long term, making it a steady "stalwart" according to the model I base on the writings of mutual fund legend Peter Lynch. When we divide Integrys' 14.6 price/earnings ratio by the sum of its growth rate and dividend yield, we get a price/earnings-to-growth ratio of just 0.64. That easily comes in under the model's 1.0 upper limit. The Lynch-based model also likes that the company's 99 per cent debt/equity ratio isn't high for a utility (the electric utility industry average is 133 per cent, the natural gas industry average is over 350 per cent).

Royal Dutch Shell (RDS.A)

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The Netherlands-based oil and gas giant gets high marks from my James O'Shaughnessy-based model. This strategy likes Shell's size ($448-billion in trailing 12-month sales), solid $11.37 in cash flow per share and strong 4.8 per cent dividend yield.

Pepsico Inc. (PEP)

In addition to its signature cola, this company is behind brands that include Doritos, Gatorade, Tropicana, Lay's, and Quaker Oats. Pepsi is the sort of large, solid company that my O'Shaughnessy value approach likes. It's big ($131-billion market cap, more than $65-billion in sales over the past year), has $6.31 in cash flow per share, and offers a 3 per cent dividend yield.

John Reese has no positions in the stocks mentioned in this article.

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