The current stock market environment makes finding value stocks a challenge. Gone are the days when an investor could simply scan the market for underperformers. Finding true value in the market now requires digging deeper into the fundamentals as they compare to others in the sector.

My research has uncovered three stocks providing actual value at current share prices. 

1. Ultra Clean Holdings (Nasdaq: UCTT)
Shares of this small-cap semiconductor manufacturer have soared over 240% this year. But despite being one of the top performers this year, UCTT remains a solid value pick due to its price-sales (P/S) ratio of 1.16. With the average P/S ratio in the sector being 2.12, UCTT’s value shines. 

The P/S ratio is critical when evaluating companies in the technology space since it eliminates accounting games and management chicanery from earnings results. The P/S ratio is simply calculated by dividing the stock price by annual revenues, and provides a relatively accurate value picture that can then be compared to the company’s peers. 

#-ad_banner-#Although it’s unlikely we will see this stratospheric stock performance repeat itself, UCTT continues to be an ideal value stock for your portfolio. Earnings per share (EPS) exploded over 100% in 2016, with expected three- to five-year growth projected at 15%. In other words, this company is no flash in the pan. 

Ultra Clean also fits the definition of a growth stock, with projected sales growth of over 57% compared to an average of less than 11% for the sector and just over 5% for the broader market. 

From a technical standpoint, a double top is about to form in the $32 per share zone. Set buy orders for a breakout in the $33 area for technical price confirmation. 

2. M/I Homes (NYSE: MHO)
This small-cap homebuilder with a $713 million market cap is set up to be an ideal value play in the bullish homebuilder space. 

The Fed’s judiciously applied interest rate increases have done little to nothing to squelch bullish fever with homebuilders. Economic tailwinds, including solid GDP performance, the White House’s growth plans, and climbing hourly wages, have built the framework for an upward trend in the sector. 

M/I Homes boasts a price to earnings (P/E) ratio of 9.5, the best number across its small-cap peers and a 63% discount to the S&P’s 25.5 average. Five-year EPS growth of just under 26% also ranks the stock solidly within its group. 

Fundamental momentum is further aided by record numbers of contracts, homes delivered and revenue in the second quarter of 2017. Net income ramped higher by 27% after one-time charges, and the ever-critical profit margin increased 50 basis points year-over-year to 7.4%.

All these bullish factors are capped off by a four-year extension the maturity date of MHO’s credit facility and a borrowing ability improvement to $475 million. Credit is the lifeblood of builders and MHO is very well-positioned for continued growth.

Looking at the technical price picture, the stock has rallied off its early September lows, hitting minor resistance at $28.50 per share. I recommend entering long on a break of $28.75 per share. 

3. Infosys LTD (NYSE: INFY)
Switching gears to the emerging markets, India’s Infosys LTD is an ideal buy candidate for the value-seeking investor. 

India’s second-largest tech company, Infosys is a $33 billion-plus market cap consulting, technology, and next-generation services provider. Shares are trading lower by over 7% in the last 52 weeks, placing the 2.7% yielder deep in the value zone. 

With revenue of over $10 billion, a P/E of 15, and net earnings margins higher than 22%, INFY’s fundamentals tell a story far more significant than the share price. Add in 150% average annual sales increases and 140%-plus EPS growth over the last five years and a compelling buy case emerges at the presently depressed share price. 

Infosys is benefiting from its leveraging of automation, machine learning, optical recognition, and big data analytics for its clients. An aggressive acquisition and investment strategy has resulted in six new acquisitions in 2017. These innovative companies focus on autonomous vehicles, artificial intelligence, cloud computing, and other cutting-edge technologies. 

Fiscal 2017 saw over $3 billion in new business and five additional $100 million clients, confirming the upward trajectory. 

Looking at the shares technically, a crossover of the 50- and 200-day simple moving averages is about to occur. Going long on a break of the 200-day SMA at $14.90 is the best play on this value stock.

Risks To Consider: Risk exists in every investment, and value stocks are no exception. Always use stop-loss orders and diversify when investing.

Action To Take: In a market showing diminishing opportunities for value investors, consider adding one or more of the above value stocks to your portfolio.

Editor’s Note: When a group of millionaires and billionaires gather in one place to reveal their favorite investment, you need to know about it. So our Chief Investment Strategist, Jimmy Butts, investigated what they discussed, including where they recommend you put your money in 2017… His full findings here.