3 Undervalued Strong Buy Stocks To Hold In 2026

Last week, the benchmark S&P 500 index dropped by 0.28% — and the losses continued to extend on Monday, with mega-caps driving the brunt of the pullback.

While there’s no reason to be particularly alarmed, there is quite a strong hint of wariness in the air. Major Wall Street firms such as Bank of America and Stifel have issued conservative 2026 targets for the index, while also noting material risks of a recession, which could send the index plunging with double-digit losses.

In circumstances such as these, you’re likely to see a sizable shift away from your typical high-risk growth stocks to something more conservative. Stock valuations will only become a more meaningful factor as time goes on — but there’s an opportunity hiding in that fact.

By preempting the rest of the market and making the shift to value stocks ahead of time, you can potentially secure some pretty sweet entry prices for yourself. However, not every stock with a low valuation is worth it. In fact, plenty of stocks that are “undervalued” are undervalued for a reason.

So, what is to be done? It’s simple in theory, and slightly more difficult in practice. You need to identify mismatches — equities that the market has mispriced and undervalued without due cause.

Easier said than done? Perhaps — but we’ve cracked the code. The first thing you’ll want to do is turn to our…

Value Stock Strategy

To evaluate stocks, our proprietary quant rating system uses 115 unique factors divided into 7 categories. Those 7 categories are our Component Grade ratings — together, they coalesce into one easy-to-understand, actionable metric — a stock’s Zen Rating.

Each day, it looks at roughly 4,600 stocks. A Zen Rating of A, equivalent to a Strong Buy rating, is only given to the top 5% of stocks on any given day. That immediately narrows down the search for promising equities — but it does also leave you with roughly 230 stocks to consider.

It’s a great start, but there’s still room to optimize, refine, and hasten up your research. The simplest way to do that is to take a look at our exclusive Zen Strategies.

Each Zen Strategy is a carefully-built portfolio consisting of just 7 rigorously selected stocks. Since we’re looking for undervalued equities, today you’ll get a sneak peek at our Value Stock Strategy.

Our Value Stock portfolio has an all-time annual return of 25.02% — however, it has been quite the outperformer in 2025. Since the start of the year, this strategy has provided a return of 32.77% — and since the beginning of December, it has seen a 10.05% gain, far outclassing the S&P 500’s -0.40% loss in the same timeframe.

Let’s take a look at 3 promising tickers from this exclusive portfolio — 2 new additions plus 1 stock that has been in the Value Strategy since early November.

Korea Electric Power (KEP)

Our first entry for today is slightly atypical. Korea Electric Power is the largest utility company in South Korea — and it’s also majority state-owned, with 51% of the business’s shares owned by the South Korean government. KEP has a Zen Rating of A — it currently ranks in the top 2% of the stocks that we track, and is rated 62nd overall.

The average stock is currently trading at a price-to-earnings (P/E) ratio of 45x. The average regulated utility stock is trading at a much lower P/E of 17.05x. And then there’s Korea Electric Power — which is trading at a measly P/E of 8.77x. Straight off the bat, this puts it in the top 1% of equities in terms of the Value Component Grade rating.

However, what makes this a real opportunity is the fact that KEP also ranks in the top 16% for Growth. Moreover, Korea Electric Power shares have already surged by 155% since the start of the year — which has secured a spot for the stock in the top 3% for Momentum.

KEP’s last earnings call, which delivered a double beat, was a month ago. In that time, the stock has only seen a 3% increase in price. Here’s the kicker — our Artificial Intelligence rating uses a neural network trained on more than two decades of market data to identify likely outperformers, and in this category, our first entry ranks in the 96th percentile.

At the current valuation, Korea Electric Power shares are a steal — if you’re looking for a long-term addition to your portfolio, an incredibly cheap stake in a business whose job it is to keep the lights on in a G7 economy is a no-brainer.

Bausch Health (BHC)

Bausch Health develops, manufactures, and markets a wide variety of eye health, gastroenterology, and skin treatments. This $2.56 billion market-cap pharma stock currently ranks in the top 2% of the equities that we track, and is rated 66th overall out of roughly 4,600.

BHC is trading at a P/E of 7.13x — however, its price-to-earnings growth (PEG) ratio is even more impressive, standing at just 0.12x. In simple terms, Bausch Health is incredibly undervalued relative to its growth prospects — put another way, BHC ranks in the top 1% for Value and the top 14% for Growth.

There’s one interesting tidbit about this business — management seems to be all in. A whopping 99.22% of the insider transactions tied to the stock in the past 12 months have been purchases, placing BHC in the 90th percentile of stocks in terms of the Sentiment Component Grade rating. And just like our previous entry, Bausch Health seems set to outperform — when it comes to Artificial Intelligence, it ranks in the top 4%.

Lastly, it’s an open question as to how long BHC will remain undervalued for. While the stock is still down some -13.29% on a year-to-date (YTD) basis, share prices have gone up by 16.69% since the company’s last earnings call in late October. The business has also successfully refinanced some of its debt and recently bought out its distributor in China, so there’s no lack of positive catalysts either.

Herbalife (HLF)

Our third and final pick for today is dietary supplement titan Herbalife. HLF shares currently rank in the 92nd percentile of the equities that we track. As a mature, stable business, it’s little wonder that Herbalife ranks in the top 82nd percentile of stocks in terms of our Safety rating.

HLF is also in the middle of a turnaround — the company has outperformed analyst estimates for 7 quarters in a row (and by significant margins). Thanks to this, Herbalife is also in the top 11% for Sentiment.

However, what truly stands out in HLF’s case is the fact that it is at the very top of our list in terms of not one, but two Component Grade ratings — these being Value, of course, but also Financials. When it comes to the former, HLF’s P/E ratio of just 4.65x places it in the top 1% — and thanks to an impressive balance sheet, the stock is also in the top 2% in terms of the latter.

Last week, HLF shares rallied by 24.25% — the window has started to close, but there’s still time for you to secure a solid entry price.

Interested In More Great Stock Picks?

The 3 stocks highlighted above are just a fraction of what you get from our proven Value Stock strategy. 

That’s because each day our system recalibrates — and Zen Strategies members get access to the 7 top Buy the Dip stocks based on 115 different parameters that point to outperformance. 

See all Top 7 Value Stocks here > 

However, maybe value stocks aren’t what you’re interested in right now. Perhaps you would like to see all 11 of our market beating strategies including Growth, Momentum, Technology, and our coveted AI Factor model. 

Each featuring the top 7 stocks.

Each featuring tremendous performance

We spell it all out in this timely presentation below that lives up to its name:

10 Minutes a Month to Beat the Market > 

What to Do Next?

• 77 Best Stocks NOW! >
• See All “A” Rated Stocks with +32.52% Average Annual Return >
• 2 New Stocks to Buy from Steve Reitmeister >

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