There are some claiming that this market is too high and there is no value left to be found. And to them I say…RUBBISH!

Yes, the journey to find value, and exceptional upside, is made harder as we pound out record high after record high. But if you do a bit more homework, and dig a little bit deeper, there is value to be found like the 4 stocks highlighted in this article: Melco Resorts (MLCO), Ingles Markets (IMKTA), Replimune Group (REPL) and Karyopharm Therapeutics (KPTI).

At the bottom of the article I will share the secret sauce of this research project narrowing down from about 8,000 stocks to just these 4. The shorthand version is that we don’t just want stocks with low PE’s or declining earnings prospects (aka value traps). Instead we want healthy growth stocks that just so happen to be 40% to 71% under fair value.

Here are more insights on each of these 4 stellar value stocks:

Melco Resorts (MLCO): Melco was impressing the investment world as one of the most attractive growth plays back in 2017 and 2018. That’s when they started to show their mettle as a leader in the Asian gaming world. Unfortunately, MLCO took it pretty hard over the past year as the US-China trade war flared up which brought with it concerns over the health of the Chinese economy.

Even with those dark clouds overhead, MLCO just kept proving that there was still plenty of growth on tap. Looking forward analysts expect them to keep growing earnings at 20% or more per year. Shares are finally showing life from that trade war induced weakness. Yet still a far cry from the average MLCO target of $31.33. And certainly way off the pace of the street high $37 target affixed to shares. Every stock is a little bit of a gamble, yet this gaming company shows good reason to believe it’s a pretty decent decent bet.

Replimune Group (REPL): Now we take a journey into the more speculative world of biotech stocks. In this case with REPL who has a lot riding on oncolytic immune-gene therapies to treat cancer. As you might imagine this is a play on the future potential. But for as small as the company is there are some big Wall Street analysts taking notice. 7 analysts in all are watching their every move and yet still all labeling REPL a Buy.

On the value front the average target shows 56.88% upside from current levels. Yet still some, like 5 Star analyst, Anthony Butler from Roth Capital believes that $30 is a more rightful destination for Replimune shares. This is the kind of stock that deserves a lot more research on your part than these short paragraphs. However, these 7 analysts who have done ample homework believe that REPL deserves your attention. So check it out.

Ingles Markets (IMKTA): This stock is wildly different than the other two. That’s because with IMKTA we are talking about a small regional supermarket chain in the Southeast with aspirations to grow beyond their current borders.

Yes groceries are a low margin business, but IMKTA has enjoyed success for about 50 years and ready to grow beyond the existing 200 locations. Analysts watching this story closely believe that $74 is fair value for shares, which makes Ingles Markets the most attractive value on our board today with 71% upside.

Karyopharm Therapeutics (KPTI): Here we have yet another oncology drug company kind of like REPL. However, KPTI does have existing drugs on the market with revenue flowing in. So even with just $40 million in revenue this year prospects point to a tripling of that next year which is why we have 11 Wall Street firms taking notice.

The average upside target for KPTI is 42.5% above current levels. However, the 5 Star analysts at H.C. Wainwright, Edward White, is pounding the table with a street high $37 target which was reiterated a week ago. If this analyst is right it would mean shares will have doubled from current levels. Just like REPL, you need to do your homework on KPTI before investing. However, with that much upside potential it is certainly worth a further look.

Want more great stock picks? Then check out these additional resources:

POWR Rating A (Strong Buy) Stocks

Reitmeister Total Return portfolio

And here are specifics on the stock screening process I went through to uncover these 11 stocks with the most upside.

• 8,000+ US based stocks to start with.
• 2,322 with POWR Rating of A or B. As you probably know by now, this is our exclusive rating system that is built on top of 4 different scores of a stocks attractiveness. Everything from long term to short term view. Plus Industry Rank and how well it stacks up inside its industry. When rolled together it points to stocks experiencing the most healthy momentum at this time and thus likely to stay on the rise.
• 2,099 stocks with a price above $10. Yes, often those stocks under $10 are exciting with tremendous upside potential. However, that low price also comes with additional risk. So I believed it was best to them out for now.
• 1821 with a Wall Street price target above $10…because if below our $10 price minimum above, then there is no upside potential to talk about.
• 1661 with $500 million+ market cap. I am OK considering small caps, but under $500 million we are talking about picks that are too speculative.
• 482 stocks that had earnings estimates not heading lower for this year and next. You can see how this important growth health check knocked out 71% of the stocks. Just think about it this way, a company whose earnings outlook is going down is likely managed poorly and likely to miss earnings again in the future. That is what creates a value trap (a cheap looking stock that only heads lower and lower). This vital criteria puts us into stocks whose outlooks remains healthy and more likely to attain their fair value targets.
• 4 Stocks with 40% or more upside to fair value targets set by Wall Street analysts. And yes, Wall Street target prices are the best universal choice of value metric. That is because different industries have different methods of valuation and just using PE, PEG, Price to Sales, Book Value, Discount Cash Flow or other valuation metrics across all industries will have you missing many attractive opportunities.

MLCO shares were unchanged in after-hours trading Wednesday. Year-to-date, MLCO has declined -7.65%, versus a 2.95% rise in the benchmark S&P 500 index during the same period.

About the Author: Steve Reitmeister

Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks. More...

More Resources for the Stocks in this Article