Investors are showing renewed optimism in the market as COVID cases keep falling and corporate earnings reports look strong. However, many stocks are way overvalued. That's why investors should consider mid-cap value stocks such as Assurant , Inc. (NYSE:AIZ), Jabil Inc. (JBL), and First American Financial Corporation (NYSE:FAF).Even though ongoing supply chain disruptions and record-high inflation worry investors, impressive third-quarter earnings reports so far have helped the major stock market indexes rally. According to a FactSet report, more S&P 500 companies are beating EPS estimates for the third quarter than average and beating EPS estimates by a wider margin than average.
Moreover, the Conference Board Consumer Confidence Index stood at 113.8 on October 26, increasing from 109.8 in September. Given the positivity in the market, many stocks have reached valuations that are not in sync with their growth prospects. However, several stocks are still trading at reasonable valuations. According to Research Affiliates Founder and Chairman Rob Arnott, value stocks might provide a 5-10% return over the next decade.
So, it could be wise to bet on quality mid-cap stocks Assurant, Inc. (AIZ), Jabil Inc. (JBL), and First American Financial Corporation (FAF), which look undervalued at their current price levels. These stocks have an overall B (Buy) rating in our proprietary POWR Ratings system.