The withering sell-off is starting to fray nerves, and many investors are at the point where they don’t even want to look at their account values. The bottom line is, while a bull market correction like we are seeing is troubling, it was needed, and bear markets rarely start when the economy isn’t in recession. A recent research report from Jefferies highlights the firm’s top new value stock picks, which may be just the ticket for nervous investors.

Jefferies has pinpointed seven top value calls for investors to consider, and we have screened the list for the four that may have the best upside potential based on the current price targets, or that provide the most safety in troubled market waters. All are rated Buy at Jefferies.

American Electric Power

American Electric Power Co. Inc. (NYSE: AEP) is one of the largest electric utilities in the United States, delivering electricity to more than 5.3 million customers in 11 states. The company ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the United States. It also owns the nation’s largest electricity transmission system, a more than 40,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines, more than all other U.S. transmission systems combined.

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Many on Wall Street feel that the stock trades at a discount to its utility peers, and they feel it deserves a premium. They also think the company will sell generating assets and buy back shares with the proceeds, which will be accretive.

American Electric Power shareholders are paid a solid 3.8% dividend. The Jefferies price for the stock is $61. The Thomson/First Call consensus price target is at $60.87. Shares closed on Tuesday at $56.13.
DSW

This ranks high with men and women as one of the favorite stores to buy something everybody has to have. DSW Inc. (NYSE: DSW) is a leading branded footwear and accessories retailer that offers a wide selection of brand name and designer dress, casual and athletic footwear and accessories for women, men and kids. As of August 11, 2015, DSW operates 449 stores in 42 states, the District of Columbia and Puerto Rico, and it operates an e-commerce site and a mobile website. DSW also supplies footwear to 374 locations in the United States under the Affiliated Business Group.

The stock has been very weak lately and is trading near three-year lows. While the 2015 growth outlook is weaker than some on Wall Street expected, the Jefferies analysts think the company is in the midst of a solid turnaround as it evolves to a multi-channel retailer. While second-half numbers could continue to bog down shares, the margins are expected to get back to 12%, which suggests much higher earnings power. Plus, the analysts cite that, trading at a three-year low, and at just 14 times forward earnings, the stock is very compelling at these levels.

DSW investors are paid a 3.2% dividend. The Jefferies price objective is $37, and the consensus target is lower at $36.67. The stock closed Tuesday at $24.80.

FMC

This company has been hit hard and may be offering investors some of the best value in the Jefferies list. FMC Corp. (NYSE: FMC) is a diversified chemical company that provides solutions, applications and products for the agricultural, consumer and industrial markets in North America, Europe, the Middle East, Africa, Latin America and the Asia-Pacific.

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Jefferies notes that the multiple has compressed by 30% as the headwinds from the agriculture sector now appear to be priced into the stock. The analysts see positive catalysts next year as FMC starts to see the benefit from the Cheminova acquisition, and earnings come up against much easier comparisons. Toss in the fact that the stock trades at a low 10 times 2016 estimated earnings, and this is a true value play.

FMC investors are paid a 2% dividend. Jefferies upgrades the stock to Buy with a price target of $47, while the consensus stands higher at $52.22. The shares closed Tuesday at $32.93.

Synchrony Financial

Hit hard since late July, this company may be the perfect value financial stock for a growth portfolio. Synchrony Financial (NYSE: SYF) is one of the nation’s premier consumer financial services companies. The company is the self-described largest provider of private label credit cards in the United States, based on purchase volume and receivables. They provide a range of credit products through programs established with a diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and health care service providers to help generate growth for the company’s partners and offer financial flexibility.

The Jefferies team notes that private label cards are gaining share, and their research suggests a continuation of that trend. They also point out that retailers continue to push back on rates, and private label cards offer more of a symbiotic relationship for retailers. The analyst also believes that Synchrony offers the potential for capital returns, after the spin-out from General Electric.

The Jefferies price target is $42, and the consensus estimate is $37.80. Shares closed Tuesday at $31.04.

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Now may be a good the time to rotate some capital to these solid value stocks and away from high-beta growth. While the odds for a fourth-quarter rally are substantial, the markets have their work cut out for them just to get back to even for the year.

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