The S&P just made new record highs. Unfortunately that means that value is a lot harder to find.

That’s why I spent this past weekend on a research project to uncover the rare few stocks with the best value prospects at this time. In the end I found 11 companies with the right stuff. Not just value, but also strong fundamentals and momentum that should make them timely investments.

One of the names that jumps off the screen is Spotify Technology (SPOT). Yes, that same Spotify music service that you probably listen to all day long.

Not only did SPOT beat earnings by 202% (not a typo), and shares exploded higher on the news, but according to Wall Street analysts there is still 18% more upside to fair value at $173.40. But actually TipRanks.com shows that there are a number of 5 Star analysts with target prices of $180 to a street high of $200.

Another name that stands out is FTI Consulting (FCN). Typically consulting firms are slow and steady organizations. NOT THIS ONE!

Beyond the 58% earnings beat this past quarter…FCN actually averaged a 66% beat the past 4 quarters. This is a statement of tremendous earnings momentum with no signs of stopping.

The initial reaction to the latest earnings report was FTI Consulting sprinting up to a new high of $118. Next thing you know a 10% sell off takes place down to $107. This is where the value opportunity kicks open wide as the average price target still stands at $140.

(Note that FTI Consulting is a recent addition to the Reitmeister Total Return portfolio).

Before I show you the full list of 11 exciting value stocks, I first want to tell you the criteria I used to find these rare shares. They are not just underpriced, but also display strong fundamental and momentum characteristics to increase the timeliness of these shares. Here are the full details:

• POWR Rating of A or B: this is our proprietary rating system that measure 4 aspects of a stocks attractiveness. Everything from the long term Buy and Hold grade to its near term timeliness in the Trade Grade. Then it looks at the company it keeps by measuring the health of the industry group followed by how it stacks up within the industry. This all boils down to a stocks timeliness because as Newton said “a body in motion stays in motion”.
• Earnings Beat: In the category of “what have you done for me lately?” we want to make sure that company fundamentals are healthy. So yes, most companies beat earnings. So this is a low hurdle for companies to cross. That’s why I put the next point into place as a more stringent indicator of healthy fundamentals.
• Earnings Estimates Going Higher: We want the Wall Street analyst community to be so impressed with earnings results that they actually raise earnings estimates for the future. Not just the current year, but for next year as well. Meaning whatever positive elements took place in the most recent earnings report they expect to repeat out into the future. This is the best fundamental measure of health for any company and greatly decreases the odds of being stuck in a value trap.
• Price Greater Than $10: Granted, stocks under $10 can be fun, but they come with a LOT more risk. So we want to stay focused on companies above this threshold.
• Most Upside to Target Price: This is my favorite value metric. More than PE, Book Value, PEG, Price to Sales and the like. That’s because every industry has different measures of how the companies are valued. For example, energy companies are more about cash flow and net asset value of reserves than earnings. No one understands these unique measures of fair value than Wall Street analysts whose sole focus is how to monitor the health and value of the companies in their coverage. So here we want to focus on the companies with the most upside to fair value that also have the positive results for earnings and momentum. Meaning there are stocks with more upside to fair value…but they do not have these important elements behind them that increase timeliness and decrease the odds of being stuck in a value trap.

Discover the full list of 11 stocks below. When you see a stock you like then click on the ticker to research further. Remember that the POWR Ratings system has 4 component elements that help you explore the full attractiveness of the stock. Get going below:

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

POWR Ratings Full Strong Buys List

Reitmeister Total Return portfolio

SPOT shares rose $1.58 (+1.08%) in premarket trading Monday. Year-to-date, SPOT has gained 29.44%, versus a 24.20% 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...

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