With earnings for the third quarter rushing in fast and furious, analysts and strategists on Wall Street are also starting to get some color from companies not only on the fourth quarter, but for 2016 as well. The bottom line for investors is that a timid Federal Reserve may push out the first interest rate hike to March, but high multiples may be less and less tolerated.

Each week we cover the new value calls from the analysts at Jefferies, and increasingly, some of the calls may look surprising as some solid big blue chips companies are becoming so cheap on a multiple basis they are ending up in the value arena. This is the best of both worlds for investors, when large cap growth companies become inexpensive enough to have a value call.

Here are four of this week’s value stock to buy from Jefferies. All are rated Buy.

Citigroup

This large cap banking giant would usually not hit the value screen, but it does at Jefferies and could have solid upside. Citigroup Inc. (NYSE: C) is very cheap, trading at just 9.15 times estimated 2015 earnings, and it is the nation’s fourth-largest bank by assets. Numerous Wall Street analysts cite that Citigroup will be a leader in buyback payouts to shareholders. Combined with the bank’s strong domestic and international business, and a better overall economy, plus the headline risk over bank stress tests being removed, share purchases look wise here.

Jefferies recently upgraded the stock to buy and points out that it sees the tangible book value growing 14% by this time next year. Citigroup reported softer earnings than expected last week. However, expense control was solid, and the analysts still maintain the stock remains cheap at only 88% of tangible book value.

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Citigroup investors are paid a small 0.4% dividend. The Jefferies price target for the stock is $60, and the Thomson/First Call consensus target is $63.96. Shares closed most recently at $52.86.
Centene

Centene Corp. (NYSE: CNC) is added to the value list, and it posted very strong second-quarter earnings. The company is a leading multiline health care enterprise that provides programs and services to government sponsored health care programs, focusing on underinsured and uninsured individuals. Jefferies sees the stock as a pure-play Medicaid managed care organization with a solid growth outlook driven by geographic expansion, health care reform and managed care penetration of Medicaid.

Jefferies notes that the stock is down 30% from the highs printed in July and now offers a very compelling value. With an 18% standalone price to earnings and a 14 times earnings pro forma for Health Net, which the company acquired in July in a $6.3billion deal, the analysts see a gigantic potential of 90% upside in three years.

The Jefferies price target is $88. The consensus figure is at $83.13. Shares closed Monday at $60.65.

HCA Holdings

This top company also has rolled over lately and is offering a good entry point. HCA Holdings Inc. (NYSE: HCA) has scale advantages, as the largest private hospital operator in the United States, and is diversified geographically. The company also benefits from local market density, with the number one or two market share in most of its local markets. Many on Wall Street agree that increasing Medicaid enrollment and the potential for additional states to expand Medicaid eligibility could provide upside to its model and provide built in growth for 2015.

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Some Wall Street firms feel that estimates for HCA are conservative for the rest of 2015 and beyond. It also has been noted that HCA has as much of the potential health reform benefit in front of it as any of the hospital companies due to its limited benefit from Medicaid expansion in its service territory to date. HCA recently reported almost a 1% increase in uninsured admissions and higher wage expense driven by the use of temporary employees, and the stock remain cheap a low seven times 2016 EBITDA.

Though the Jefferies price target is $88, the consensus target is higher at $98.14. The stock closed Monday at $73.51.

Superior Energy Services

Superior Energy Services Inc. (NYSE: SPN) serves the drilling, completion and production-related needs of oil and gas companies worldwide through its brand name drilling products and its integrated completion and well intervention services and tools, supported by an engineering staff who plan and design solutions for customers.

Some Wall Street analysts feel that Superior could be one biggest beneficiaries of the potential divestitures coming from the Baker Hughes and Halliburton merger. The company is one of Wall Street’s favorite small-mid cap stocks to play the U.S. land services recovery, and analysts think investors should see the impact of cost reductions as this year progresses, which some feel could help offset pricing pressure. Jefferies points out that the sector downturn has led to reductions in capital expenditures and capacity attrition, a positive for the survivors like Superior, that have managed both extremely well in a very difficult environment.

Investors are paid a 2% dividend. The $18 Jefferies price target is less than the consensus target of $20.04. Shares closed Monday at $15.44.

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Jefferies is focusing on companies with solid balance sheets, good forward estimates and low valuations. These are the traits that investors should start to look for as the market gets ready to move away from the ultra-low interest rate environment of the past six years.

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