What's Still Worth Buying? A Lot

After a stunning six-month run of about 33% on the Russell 2000 index and 22% from the S&P 500 ETF , many folks fear they've already missed the chance to own cheap stocks. Without doubt, few stocks are as cheap as they sat six months earlier. Especially notable is that smaller-cap companies turned the table on their larger brethren, since the third week of September. That trend accelerated this month, pushing formerly ignored and out-of-favor issues into a clear lead. The two-week, 10-trading day, chart below illustrates the almost 50% month-to-date outperformance of the RUT vs. the SPY. The value-oriented stocks I've been writing about here on Real Money Pro have been on fire this month and show no signs of slowing down. It isn't just small caps, however, that are moving. See my recent article on CVS Health and Walgreens Boots Alliance for evidence of that as well. The obvious question becomes, What's still worth buying after a major short-term run up? I'm not advocating chasing even my favorites on a day like Monday -- when the broad indexes are up from 0.4% on the Nasdaq to 1.18% on the Dow Jones industrial average, while the picks below surged by over 5.3%. I'd still recommend all the shares below, while hoping to pick them up on pullbacks. My Sexy 16 remain about 63%, as a group, below their respective 2018 to 2020 peak prices, even after moving up sharply. Many pay nice dividends. All still offer juicy upside over the coming 12 to 18 months. I've been positioning heavily into retailing and banking names, which were previously among the least favored industry groups. Many have already produced significant positive earnings surprises. I think there is much more to come as better than expected quarters turn into huge year-over-year quarterly comparisons as they begin lapping last winter and spring's Covid-ravaged results. My single largest dollar holding remains shoe designer/retailer Caleres . It's due to report end of October results on Thursday. Expectations remain very low. I believe that very low bar will be an easy hurdle, triggering a major upturn if I'm correct. I see that same scenario playing out for Designer Brands when they report again. Specialty arts and crafts retailer Michaels will release fiscal Q3 numbers on Dec. 3. Its last quarterly report was spectacular, sending the shares up sharply. MIK hit $11.67 intraday on Sept. 1. Michaels ran from about $3 in mid-May to almost $9 on June 8 after a good report. Three days later it had given back a stunning 42% as crazy day traders (think Robinhood clients) pushed it around. That undeserved pull back allowed investors with rational reasons for trading to pocket about 127% gains by the start of September. That September peak was followed once again by an ultra-short-term selloff. After that crazy dip MIK trended sideways for a while, before retreating to as low as $7.40 on Nov. 12. Treat that pullback as a gift. Analyst expectations have been adjusting upwards over the past three months. The end of October quarter's projection has more than doubled, from 28 cents to 59 cents. Full fiscal year results have been ratcheted up similarly, from $0.94 to $1.76. MIK sells for a ridiculously cheap, 4.6-times current EPS and less than 3.9-times next year's estimate. This stock could easily double or triple without even becoming expensive. You can do the same exercise on all 16 of the stocks on my list. On average, I believe you'll see average 147% increases within 12 to 18 months. The move from stay-at-home to reopening appears primed to continue with good news from two vaccine manufacturers already. The trend from nothing but tech, nothing but growth back into value is still in its early stages. It's not too late to get on board this very powerful train. (CVS is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells this stock? Learn more now.)

What's Still Worth Buying? A Lot

I've got 16 names to consider -- and one that's really a crafty one.

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