As the chatter over a Federal Reserve rate increase in June gets louder, the chances that volatility will spike along with the increase are getting bigger. While it’s possible the Fed could wait until July, the odds are getting bigger that a raise is in the cards. For stock investors, it makes sense to move out of higher volatility momentum-type stocks into quality value companies.

Jefferies is out again this week with top value calls from some of the firm’s very best analysts, and we found four that could be solid additions to growth portfolios. These four stocks to buy not only are solid value plays, but they could have good near-term upside potential. All are rated Buy at Jefferies.

Encana

This top stock has been absolutely mauled, down a gigantic 84% since the summer of 2014. Encana Corp. (NYSE: ECA) engages in the development, exploration, production and marketing of natural gas, oil and NGLs in Canada and the United States. It owns interests in plays such as the Montney in northern British Columbia and northwest Alberta, Duvernay in west central Alberta, Clearwater in central and southern Alberta, Deep Panuke in offshore Nova Scotia, Cadomin/Doig in northeast British Columbia, Horn River in northeast British Columbia and Granite Wash/Doig in northwest Alberta.

The Jefferies analysts are bullish on the company, and earlier this year elevated the stock to the Franchise Picks portfolio, which represents the highest conviction stocks at the firm. The company reported weaker first-quarter numbers year over year, but the Jefferies analysts feel that the big reduction and debt and the potential for the company to sell assets remain a positive.

The Jefferies price target for the stock was raised to a whopping $12, and the Thomson/First Call consensus target is much lower at $8.78. The shares closed Tuesday at $7.26.

UnitedHealth Group

This is a top stock to buy in the rapidly consolidating managed health sector. UnitedHealth Group Inc. (NYSE: UNH) offers the full spectrum of health benefit programs for individuals, employers and Medicare and Medicaid beneficiaries, and contracts directly with more than 850,000 physicians and care professionals and 6,000 hospitals and other care facilities. The company offers a broad spectrum of products and services through two distinct platforms: UnitedHealthcare, which provides health care coverage and benefits services, and Optum, which provides information and technology-enabled health services.

The company has posted outstanding earnings over the past year, and it is one of the companies that limited exposure to the public exchanges. Trading at 3.5 times book value, and offering investors a good entry point, the stock makes great sense now, especially with solid enrollment increase for the fourth and first quarter. The analysts also note that the OptumCare opportunity is under-appreciated as the business can expand into more markets and note the value proposition is resonating with MCOs.

UnitedHealth investors are paid a 1.51% dividend. The Jefferies price target for the stock is $153, and the consensus target is at $149.24. The stock closed most recently at $132.59 per share.
Urban Outfitters

This is a top company going back to the future, reviving the very hot halter dresses. Urban Outfitters Inc. (NASDAQ: URBN) is an innovative specialty retail company that offers a variety of lifestyle merchandise to highly defined customer niches through 240 Urban Outfitters stores in the United States, Canada and Europe and catalogs and websites; 218 Anthropologie Group stores in the United States, Canada and Europe and catalogs and websites; 114 Free People stores in the United States and Canada and catalogs and websites; and Free People wholesale, which sells its product to approximately 1,800 specialty stores and select department stores worldwide.

The company recently hired Celect to help optimize in-store assortments. Celect is helping retailers worldwide make improved decisions about what to buy and allocate to stores. Leveraging existing customer data, Celect takes the guesswork out of the merchandise planning and allocation process through advanced machine learning and predictive analytics. The Jefferies team notes that they continue to see margin expansion possibilities at the company, and the company reported solid comparable sales numbers with far less markdowns.

Jefferies has a $38 price target for the stock, and the consensus price objective is listed at $32.24. The stock closed most recently at $28.47.

Wells Fargo

This large cap bank is a stock for investors to look at now for safety, dividends and solid upside potential. Wells Fargo & Co. (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.8 trillion in assets. The company provides banking, insurance, investments, mortgage and consumer and commercial finance through 8,700 locations, 12,800 ATMs, the Internet and mobile banking. It also has offices in 36 countries to support customers who conduct business in the global economy. Wells Fargo serves one in three households in the United States.

Wells Fargo has slowly, but surely, become one of the biggest mortgage lending companies in the United States, in addition to its normal banking and brokerage businesses. A continued increase in commercial real estate lending could really boost the bank’s bottom line and overall revenue. The stock also remains a top Warren Buffett holding. In fact, Buffett recently raised his holdings in the bank to 10% on the stock’s weakness.

Wells Fargo shareholders are paid a solid 3.1% dividend. The $57 Jefferies price target compares with the consensus target of $55 and the share price of $49.20 on Tuesday’s close.

While the equity markets remain the best place for investment dollars, it also wouldn’t hurt to raise some cash now. If the Fed does indeed raise rates this summer, there is a good chance the market could back up in response.

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