After years of relatively benign volatility, investors are getting a taste of something they are not very accustomed to. The Volatility Index (VIX) has been elevated since the start of the trading year, and with China, oil and other issues still stirring the pot, this could be the norm for the near future. One good idea is for investors to consider adding value stocks to their portfolios.

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.

Dean Foods

This top consumer food stock makes sense for more conservative investors. Dean Foods Co. (NYSE: DF) is a food and beverage company that processes and distributes milk and other dairy and dairy case products in the United States. The company manufactures, markets and distributes various branded and private label dairy case products, such as fluid milk, ice cream, cultured dairy products, creamers, ice cream mix and other dairy products, as well as juices, teas, bottled water and other products.

Dean Foods offers its products under approximately 50 national, regional and local proprietary or licensed brands, and private labels, including DairyPure, TruMoo, Alta Dena, Berkeley Farms, Country Fresh, Dean’s, Garelick Farms, Land O’Lakes, Lehigh Valley Dairy Farms, Mayfield, McArthur, Meadow Gold, Oak Farms, PET, T.G. Lee, Tuscan and others, and it is a top Jefferies food products pick for the rest of 2016.

Shareholders are paid a 1.9% dividend. The Jefferies price target for the stock is $23, and the Thomson/First Call consensus target is $20.70. The stock closed Thursday at $18.94.

Energy Transfer Equity

This company was trying to merge with Williams Energy but the deal looks to be falling through, despite the approval of the U.S. Federal Trade Commission. Energy Transfer Equity L.P. (NYSE: ETE) provides diversified energy-related services in the Unites States. It owns and operates approximately 7,700 miles of natural gas transportation pipelines and three natural gas storage facilities located in the state of Texas, as well as approximately 12,800 miles of interstate natural gas pipeline. The company sells natural gas to electric utilities, independent power plants, local distribution companies, industrial end-users and other marketing companies.

Jefferies likes the stock as a solid natural gas play, and with the summer heat already upon great swaths of the country, the power companies may be using more and more natural gas as demand spikes as the air-conditioning works overtime.

Investors receive a solid 7.47% distribution. The Jefferies price target recently was raised to $17 from $15, and the consensus target is posted at $16.36. Shares closed most recently at $15.28 apiece.
NXP Semiconductors

This company is considered a top play for investors looking for a chip stock with Internet of Things exposure and is down a stunning 15% since early June and is the top pick at many Wall Street firms. The NXP Semiconductors N.V. (NASDAQ: NXPI) merger with Freescale Semiconductor Ltd. was widely applauded on Wall Street, and many analysts believe the merger is transforming the company into a powerhouse. It made NXP the fourth largest semiconductor company in the industry.

It is also important to note that the combined company becomes the number one supplier in auto semiconductors, number one supplier in global microcontrollers, as well as a dominant supplier in mobile payments.

NXP is getting its chips into high-growth areas such as contactless mobile payments, the Internet of Things, mobile-phone charging, increased cellular data consumption and LED lighting. Trading at solid discount to some of its peers, many analysts are very positive on the faster earnings growth potential relative to the competition.

Many analysts feel that the company, which has a huge 15% organic earnings-per-share compound annual growth rate, is too cheap trading at 12 times consensus 2017 earnings estimates. The Jefferies team sees the pay-down of debt from the sale of the Standard Products business as a big plus as well.

Jefferies has a massive $130 price target for the stock, and the consensus target is $107.86. The stock closed Thursday at $76.47.

Zimmer Biomet

This was a huge 2015 merger that Wall Street has been very positive on. Zimmer Biomet Holdings Inc. (NYSE: ZBH) is a global leader in musculoskeletal health care. It designs, manufactures and markets orthopaedic reconstructive products; sports medicine, biologics, extremities and trauma products; spine, bone healing, cranio maxillofacial and thoracic products; dental implants; and related surgical products.

The company reported outstanding earnings at the end of April that beat Wall Street earnings and revenue estimates. The company also raised its outlook for the year as it posted a merger-driven sales surge, though an increase in expenses led to a decline in profit. The company also announced recently it would acquire Cayenne Medical to strengthen its sports medicine offerings. With shares trading at 13.6 times estimated 2017 earnings, the stock is a solid value.

Shareholders receive a small 0.8% dividend. The Jefferies price target is $135. The consensus price target is set at $127.68. The stock closed most recently at $122.02.

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These are four very solid value buys to consider as we move into the second half of what has been a very up and down 2016. With earnings season right around the corner, investors may want to buy small position to start and see how the companies report.

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