One thing is for sure, most equity investors were relieved to see a very strong rally to end last week. While the talk of a recession right around the corner looks to be very premature, the fact that the bull market is getting long in the tooth is probably not. All the more reason for investors to look for value stocks that have solid upside potential and solid valuation.

The team at Jefferies has an extensive list of top value calls, including the companies that were removed from the firm’s Franchise Picks last week. We found four companies on this week’s list that make good sense for investors looking for solid value ideas. All are rated Buy at Jefferies.

Nucor

This top steel company could do very well if the economy sees a solid pickup. Nucor Corp. (NYSE: NUE) and its affiliates are manufacturers of steel products, with operating facilities primarily in the United States and Canada. It is also North America’s largest recycler.

Nucor products produced include: carbon and alloy steel — in bars, beams, sheet and plate; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; steel fasteners; metal building systems; steel grating and expanded metal; and wire and wire mesh. Through David J. Joseph Company, Nucor also brokers ferrous and nonferrous metals, pig iron and HBI/DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap.

While the residential construction market could slow down some in 2016 after years of a very torrid pace, top Wall Street analysts remain positive on nonresidential commercial construction. Nucor always has kept a very conservative balance sheet, and it is poised for slow, but steady growth next year and beyond.

Nucor investors are paid a very solid 3.38% dividend. The Jefferies price objective for the stock is $45, and the Thomson/First Call consensus target is higher at $45.94. The stock closed on Monday at $45.15.

Oracle

This top software stock has traded sideways since last summer and may be close to breaking out. Oracle Corp. (NYSE: ORCL) develops, manufactures, markets, sells, hosts, and supports database and middleware software, application software, cloud infrastructure, hardware systems and related services worldwide. It licenses its Oracle Database software, which is designed to enable reliable and secure storage, retrieval, and manipulation of various forms of data, as well as Oracle Fusion Middleware software to build, deploy, secure, access and integrate business applications and to automate their business processes.

With shares trading at 14.98 times estimated 2016 earnings, and sporting a solid free cash flow yield, many analysts also feel that is the company’s 12C database cycle starts to contribute during calendar 2016, and the stock could very well be poised for what they term a breakout year. After recent investors meetings, some analysts raised fiscal year 2017 cloud margins to 66% from 63% and earnings per share to $2.80. Some also believe that the software giant may be on the verge of a multiyear database product cycle.

Investors in Oracle are paid a 1.55% dividend. Jefferies has $50 price target, and the consensus price objective is set at $43.50. The stock closed Monday at $38.70 per share.
Regions Financial

This smaller banking play could do well this year as rates start to rise. Regions Financial Corp. (NYSE: RF) is a company that almost every Wall Street firm likes, but the stock has traded sideways to down since this time last year. The company is one of the nation’s largest full-service providers of consumer and commercial banking, wealth management, mortgage and insurance products and services. Regions serves customers in 16 states across the South, Midwest and Texas, and through its subsidiary, Regions Bank, operates approximately 1,630 banking offices and 2,000 ATMs.

One very positive area for the bank has been the overall growth in loans that came primarily from business lending, which was led by its commercial and industrial segments. Regions also has experienced especially strong growth in auto lending, which was driven by an expanded dealer network and more accepted loans per dealer. In the past, Jefferies has pointed to awful sentiment toward the stock due to bad communication from senior management, but trading at just under 10 times 2016 estimated earnings, the stock is a solid value play.

Regions Financial investors are paid a 2.91% dividend. Jefferies has set its target at $11, and the consensus figure is $10.13. Shares closed Monday at $8.21.

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 potential divestitures coming from the Baker Hughes and Halliburton merger. Superior 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.

In the past, the Jefferies team has pointed out that the sector downturn has led to reductions in capital spending and capacity attrition, a positive for the survivors like Superior, that have managed both extremely well in a very difficult environment. They also think an equity capital raise can be a positive that investors would respond well to.

Superior investors are paid a 2% dividend. The $13 Jefferies price target for the stock is less than the consensus target of $14.06. The stock closed Monday at $12.83.

The Jefferies analysts focus 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 digest current gains.

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