As the markets continue to unwind, some top-quality stocks are getting hit hard on a percentage basis and are looking very cheap. While it has become pretty obvious that portfolio managers are shedding their big winners, and short sellers are right behind them pushing them even lower, the proverbial babies are being tossed out with the bath water. In a new report, RBC has a list of stocks with some of the largest percentage drops and the lowest forward price-to-earnings (P/E) ratios. As investors rotate from speculative growth to value, this group of quality stocks may serve as shopping list for the second half of the year.

Bed Bath & Beyond Inc. (NASDAQ: BBBY) has fallen a whopping 20.8% from its peak and trades at just 12.7 times forward earnings projections. While earnings estimates have been dropped on the retailer, a resumption in the strong housing market could be a very positive catalyst for the stock. Interest rates have dropped dramatically and that could help boost housing in the busy spring and summer selling season. The Thomson/First Call price target for the stock is $72.56. The stock closed Thursday at $63.72 a share.

Citigroup Inc. (NYSE: C) makes the list. The bank trades at an incredible 9.5 times forward earnings and is down 16.3%. With loan activity and other banking services starting to ramp up as the economy improves, adding a quality large cap bank to a portfolio at an incredibly low price makes good sense. Investors are paid a tiny 0.1% dividend. The consensus price target is $58.55. Citigroup closed Thursday at $46.23.

Gilead Sciences Inc. (NASDAQ: GILD) is a top biotech that has been crushed in the sell-off. Down an incredible 22%, the stock trades at a very low 15.2 times forward earnings. Many firms on Wall Street think the recent concerns voiced by members of Congress over the price of Sovaldi, the company’s top drug, will not remain an issue. The current launch numbers for the drug are tracking as perhaps the highest ever recorded. The consensus price target is $98.21. Gilead closed Thursday at $65.48, down more than 5%.

Mylan Inc. (NASDAQ: MYL) is one of the top generic drug companies and has been hammered. The stock is down 17.7% and trades at a very low 13.5 times forward earnings estimates. The company confirmed that a federal district court has granted its request to enforce a settlement agreement between Endo Pharmaceuticals and Mylan that ends patent litigation in connection with Mylan’s filing of an Abbreviated New Drug Application (ANDA) with the U.S. Food and Drug Administration (FDA) for frovatriptan succinate tablets of 2.5 mg. This product is the generic version of Frova, which is used to treat acute migraine headaches in adults and had almost $70 million in sales last year. The consensus price target is $60.60, and Mylan closed Thursday at $47.07.

NetApp Inc. (NASDAQ: NTAP) is a top tech name that has been blistered. The stock is down 20.5% from its high and trades at an incredible 12.6 times forward earnings. The company is a provider of storage systems and data management solutions that form the foundation for efficient and flexible IT infrastructures. The company is one of the smaller players in the electronic storage industry, but it has shown outstanding growth over the years, and some on Wall Street think it could be a takeover candidate. Investors are paid a 1.7% dividend. The consensus price target is $43.48. NetApp closed Thursday at $36.44.

There is a good chance of more selling to come. This is a long overdue price reduction in a market that has gone steadily higher. The good news for nervous investors is the stock market is still the place to be. Government bond yields have shrunk back to levels not seen since last summer, and the Federal Reserve cash spigot is still wide open. Investors need to carefully scale money into stocks they find attractive now.

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