(MONEY Magazine) – With tech stocks getting whipsawed, it seems wise to consider investing in less overheated sectors that are both cheaper and less volatile. And there are plenty of opportunities out there. We'd recommend bargain hunting in three areas that have been relatively overlooked in recent months: financial services, energy and consumer staples. These sectors don't move in sync with tech, so they can give you decent returns regardless of the Nasdaq's gyrations. While the Nasdaq plunged 34% from March 10 to April 14, the Amex Oil and Gas index actually rose 12% and financial stocks rose 13%. Food stocks fared even better, jumping 17% in those tempestuous weeks--a timely reminder of the benefits of diversification.

Within these three sectors, we've picked five stocks. To limit risk, we've favored solid companies with consistently strong earnings. They may not provide you with the giddy thrills of a hot tech stock--but sometimes that's a blessing.

FINANCIAL SERVICES: With interest rates on the rise, it may seem odd to recommend financial stocks. But fears that Alan Greenspan will keep hiking rates have created compelling bargains. Marshall Acuff, an equity strategist at Salomon Smith Barney, particularly likes Chase Manhattan (CMB), which sports a P/E of just 12 despite having a sturdy long-term growth rate of 12% a year. By comparison, a glamorous tech blue chip like Cisco, which is growing 30% a year, has a P/E of 134--so investors are paying a massive premium for its faster growth.

Chase has also proved that it can thrive when interest rates rise. Last quarter its earnings jumped 20% vs. the first quarter of 1999. And Chase is well positioned to profit richly from booming growth in banking abroad, says Acuff, who notes that "there isn't much growth in domestic banking."

Fannie Mae (FNM) is another cheap financial play. Analysts expect the commercial lender to grow 14% a year, yet it has a modest P/E of 14 vs. 25 for the S&P 500. Its growth rate is as high as GE's, but "it trades at a third of GE's multiple," says David Dreman of Dreman Value Management. "Its business is insulated from interest-rate moves," he adds, in part because the company hedges with financial instruments such as interest-rate swaps. Dreman also notes that Fannie Mae's growth rate has remained stable at around 15% for two decades.

ENERGY: Crude oil prices have dropped from $34 to $25 a barrel since March. But Jay Saunders, a Deutsche Banc Alex. Brown analyst, expects prices to stabilize at this level--about $5 above the average price over the past two decades. That's bullish for BP Amoco (BPA), a massive producer of oil and gas. The company has slashed costs and is expanding fast. Last year it posted earnings growth of 38%--spectacular for a behemoth with $84 billion in 1999 sales. Eric Greschner, a money manager with the Financial Strategies Group, expects earnings to remain robust, driven in part by the company's recent acquisition of vast natural gas reserves in Indonesia. At a price of $51, the stock trades at 19 times this year's earnings, an alluring discount to its expected growth rate of 37% for 2000.

For an even cheaper play in the energy sector, consider Kerr-McGee (KMG), a smaller company with a P/E of just 10. It has an impressive record in oil and gas exploration, and it's growing rapidly. Since January, analysts have raised their earnings estimates for 2000 from $3.60 to $5.41 per share. That would be a 63% improvement over its 1999 earnings of $3.31 a share. And Kerr-McGee has beaten earnings estimates by at least 10% in four of the past five quarters.

CONSUMER STAPLES: If you want to find cheap stocks, you need to pay attention to areas that most investors have shunned. "Food stocks have been terrible," says famed value manager Mario Gabelli of Gabelli Funds. "But I'm starting to buy them now." One of his favorites is the packaged-foods company Bestfoods (BFO), which owns brands like Entenmann's, Skippy and Thomas'. It has a P/E of 18, and it's growing earnings at about 10% a year--far quicker than the industry's traditional rate of 7%. Last year more than half of Bestfoods' $8.6 billion in revenues came from international markets, which are less mature and faster growing than the U.S. market.

Gabelli predicts that the beleaguered food industry will undergo extensive consolidation over the next few years, which should help to drive stock prices higher. Bestfoods' strength in foreign markets, he argues, could make it a prime takeover target.