Favorable market sentiment over the past month has led to sky-high valuations for several stocks. However, considering current market volatility, we think it could be wise to pick up some value stocks. The shares of fundamentally sound companies Gates Industrial (NYSE:GTES) and Olympic Steel (ZEUS) look undervalued at their current price levels, considering these companies’ immense growth potential. So, let’s discuss these names.Although the benchmark stock market indexes have rallied over the past month thanks to solid corporate earnings and the passage of a whopping U.S. infrastructure bill, concerns surrounding the resurgence of COVID-19 cases with the emergence of the omicron variant are fostering heightened market volatility. Therefore, we think investing in value stocks could be an ideal strategy now.
While the Fed has already said that it will begin reducing its monthly bond purchases, interest rates have been held at near zero for now. So, the availability of cheap money should keep driving the growth of several companies. Furthermore, the Conference Board expects the U.S. real GDP growth to rise to 5% in the fourth quarter.
Despite performing well over the past few months, shares of Gates Industrial Corporation plc (GTES) and Olympic Steel, Inc. (ZEUS) still look undervalued at their current price levels, considering their earnings growth prospects. In addition, our proprietary POWR Ratings system has rated these stocks A or B for Value and Growth along with an overall Buy rating.