I am recommending the purchase of specialty insurer Old Republic (ORI), a long-time favorite of conservative investors for its strong underwriting record and financial strength.

ORI sells close to book value and offers a dividend yield of 5.0%. At its current price, ORI should do well no matter what economic and market turmoil is ahead. Buy ORI under $18. My target is $22.

At the same time, I am recommending the sale of Valley National (VLY). The stock jumped sharply last week, but the fact that it is trading at 8.5X this year’s earnings per share (EPS) estimates does not account for the coronavirus’s impact. I am not certain all the potential bad news is captured in the stock, especially with one of the company’s main markets, New Jersey, facing a lengthy shutdown, which could pressure many VLY customers.

Sell VLY. I believe the cumulative impact of these moves will be to reduce the risk and increase the potential returns of our Buy List.

If you are an Inner Circle subscriber following the Model Portfolio, sell VLY, and buy a 5% position in ORI in the Value Sector.