(FORTUNE Magazine) – As the longtime manager of the Strong Opportunity (SOPFX) fund, Dick Weiss, 53, has often prospered by betting on companies in distress. A year ago he found himself working for one. Strong Capital Management and company founder Dick Strong were implicated in the mutual fund market-timing scandal (for more, see fortune.com). Assets under management have fallen from $42 billion to $32 billion. And in late May, SCM settled with the SEC and New York and Wisconsin officials by agreeing to pay $80 million in civil penalties. (Strong himself agreed to a lifetime ban from the securities industry and is paying penalties worth $60 million.) Soon after, Wells Fargo announced that it would acquire SCM and run it as a division of Wells's own asset-management business.

When Strong resigned in December 2003, Weiss, whose fund was not involved in market timing, took on the role of chief investment officer at the firm. He's been busy rebuilding morale and beefing up compliance procedures to avoid a repeat of the trading abuses. We asked him to give us a status update and, bearing in mind that his fund has a 15% average annualized return over nearly two decades, tell us where he's finding bargains in the market.

It's been a year since the fund scandal broke. What's the attitude inside the firm?

It was tough initially. But that's over now. The firm is doing remarkably well. We are looking forward to closing the deal with Wells and moving forward. It has been a testament to the culture and vibrancy of Strong that virtually all the key investment people signed on with Wells. We're just going forward now and managing money.

Speaking of managing money, that can't be an easy job right now.

The market reminds me a lot of how it was in 1984 when expectations had run up and the market had to wait for the proof of economic strength. We had an explosive market in 2003, and that carried into the beginning of 2004. In fact, most of the gains probably came in the first six weeks of the year. That isn't really surprising, because the market priced in a very strong recovery. But now we also have a series of uncertainties beginning with Iraq that are weighing on P/E ratios.

Are you still finding bargains?

Absolutely. A good example is Ann Taylor (ANN, $24). Everyone was in love with it not long ago. But retail has ups and downs, and Ann Taylor made some mistakes. The stock is down 35% this year. We started looking at it recently and found some things we liked, such as a new merchandise person from Banana Republic who had a great reputation. We figure by Christmas things will be looking a lot better. The stock sells at 20 times earnings when people love it, and right now it's at 12.

Where else are you sniffing around?

Cable TV. People have overestimated the impact of direct broadcasting on the cable companies. We're in this hiatus where DirecTV has a competitive product that has worried cable investors. But the window of opportunity is going to close quickly for two reasons. First is that the cable guys are rolling out TiVo-like products and building 100% digital networks. Second is that a year from now HDTV will have really taken off, and cable is the best way to get HDTV. For investors, that points to a core company like Comcast (CMCSA, $28). As an offshoot of cable, we also think that VOIP is ready for prime time. There's going to be wholesale adoption for VOIP, and that will be exciting for some of the dead and buried telecom companies like Sonus Networks (SONS, $5), which makes the switches essential for that.

You've been bullish about energy stocks. Is it still a good idea to buy in that sector?

There is a subtle shift going on. A year ago we would have liked exploration and production because those companies showed more discipline about pricing. We now favor oil-services players like Noble Energy (NBL, $51) and Weatherford (WFT, $46) that are 20% growers for the foreseeable future and are less likely to go through the boom-bust cycle as in the past.