As investors shrug off inflation and omicron variant worries, stocks seem primed to head higher. That may point to diving into the same types of names that have thrived in recent years (growth stocks). Yet, instead of jumping into the high-fliers still favorited by Wall Street and Main Street, you may want to give a look at some of the best value stocks as well.

Why? Two reasons. First, stocks are far from being out of the woods about the inflation/possible interest rate hikes problem. It could still be something that hits stocks in 2022, growth stocks in particular.

Second, even if the market avoids a correction/meltdown, growth stock valuations are still stretched. Possible gains in the coming year may be much lower than what we’ve seen in 2020 and in 2021. It may not play out this way with value stocks. In fact, many value plays, especially ones hit hard by big shifts in investor sentiment, could outperform. As long as Mr. Market warms back up to them once again.

Value stocks are not always winners. That’s on full display with the scores of “value traps” that leave investors with big regret and poor performance. But with these seven, some of the best value stocks out there, there is both deep value, plus big upside potential:

• Best Buy (NYSE:BBY)
• BorgWarner (NYSE:BWA)
• Altria Group (NYSE:MO)
• Smith & Wesson Brands (NASDAQ:SWBI)
• ViacomCBS (NASDAQ:VIAC)
• Viatris (NASDAQ:VTRS)
• Western Union (NYSE:WU)

Best Value Stocks: Best Buy (BBY)

Strong earnings, in large part due to its success with an omnichannel (in-store and e-commerce) sales strategy, was propelling BBY stock higher from early October until mid-November. During that time frame, shares in the electronics retailer spiked more than 35%.

Yet, following its Nov. 23 earnings report? Best Buy stock gave up its recent gains, and then some. It fell from over $140 per share, to around $101 per share today. The issue of earnings didn’t have a lot to do with the results themselves. The company both beat on revenue and on earnings per share (EPS) estimates.

Instead, what made investors concerned was a drop in the company’s gross margins, plus concerns about revenue growth slowing down. Along with higher promotional costs, increased retail theft is another reason for this margin drop. As seen in recent headlines, organized retail theft has surged. But while this phenomenon is a concern, and things like inflation could also affect margins down the road, the market may have overreacted.

Despite the concern about disappointment ahead, Best Buy is still upping guidance. It looks set to beat estimates once more when it reports next quarter. Trading for just 10x this year’s expected earnings, even with the risks it may be worth it to buy it after its big selloff.

BorgWarner (BWA)

Performing well earlier this year, thanks to its exposure to the electric vehicle (EV) megatrend, shares in auto parts supplier BorgWarner have lately been under pressure, due to the global chip shortage. The stock (at around $44 per share today) has struggled to move back to the $50 to $55 per share it was trading around the time this supply chain headwind emerged, as it continues to impact auto production.

However, the valuation of BWA stock may already account for these issues. Sure, trading at a price-to-earnings (P/E ratio) of 13.3x, it may be trading around its historic valuation. Some may say it’s overvalued at today’s prices, given the boom-and-bust nature of the business.

But given the potential from the vehicle electrification trend? It’s a bargain at current price levels. Based upon projections provided in its latest investor presentation, BorgWarner appears set to become an EV-focused auto parts maker within the next few years. Both growing its business, and its margins, in the process.

To top it all off, a full-on EV transformation for the “old school” industrial company could mean a higher valuation, or multiple expansion, down the road. With this, consider it one of the best value stocks, as it languishes between $45 and $50 per share.

Best Value Stocks: Altria Group (MO)

After getting bid up by yield-hungry investors, Altria began to struggle starting in late September. That’s when the tobacco company was forced to cease the importation and sale of Iqos, an alternative tobacco device, by the U.S. International Trade Commission, due alleged patent infringement.

With several smaller negative developments adding to this, MO stock has fallen back to close where it was trading at the start of 2021. So, after investors warmed up to it briefly, before shunning it once again, why buy into this quintessential “sin stock?”

Although its core Philip Morris USA unit is in secular decline, and its transformation efforts are still a work in progress, risk/return is still largely in your favor here. At least, that’s the argument a Seeking Alpha commentator made last month, referring to this an “investment opportunity with high uncertainties but low risks.”

Currently sporting a nearly 8% dividend, Altria remains a great play for income investors. Wait for what? Success with a non-cigarette nicotine delivery product. Or, perhaps a move into the marijuana business, if/when the U.S. Federal government passes reforms. A high-yielder with a low forward P/E ratio (9.5x), and possible big upside if its future becomes more promising, consider it a buy at today’s prices (around $45 per share).

Smith & Wesson Brands (SWBI)

Disappointing earnings and an analyst downgrade sent SWBI stock tanking by 28.7% on Dec 3. With last year’s tailwinds for the firearms industry no longer in play, revenues fell year-over-year. Revenue also came in far below analyst forecasts ($230.5 million actual vs. $265 million projected).

Smith & Wesson also announced it was cutting production by 27% to account for the falling demand. Yet, while lower demand does leave the risk of a “gun glut,” and a less favorable environment ahead, the stock may now be oversold. It trades for around $18 per share today, down from as much as $39.61 per share earlier this year.

Why? Even when accounting for a big drop in earnings next fiscal year (ending April 2023), shares are cheap. The low end of analyst estimates calls for earnings of $1.82 per share in FY23, implying a forward P/E ratio of around 10x. Mid-range of estimates call for $2.78 per share in earnings, implying a forward P/E of 6.6x.

Also, fears that the firearms industry may experience tough times like it did during the Presidency of Donald Trump may be overblown. With violent crime soaring, and demand still robust because of it, investors in SWBI stock, with low expectations today, could be surprised when it reports results in the quarters ahead.

Best Value Stocks: ViacomCBS (VIAC)

First collapsing after the Archegos fund blowup, VIAC stock has continued to flounder throughout the year. Wall Street remains unimpressed by the media conglomerate’s pivot to streaming. At around $28.89 per share today, it’s down close to 72% from its 52-week high.

In the eyes of the market, ViacomCBS remains a “dinosaur” media company. A melting ice cube where streaming growth fails to make up for falling earnings from its broadcast and cable TV units. Yet, this underappreciation is a great opportunity for investors looking to enter a position today.

Despite projections of earnings growth in 2022 (albeit mid-single digit growth), it’s trading for just 8.5x earnings. This is another name where better-than-expected results could result in an outsized positive reaction by investors. Especially if the growth of its Paramount+ subscription streaming service, and its PlutoTV ad-supported streaming service, starts to more than make up for the decline of its legacy media assets.

Add in the potential for multiple expansion, if Wall Street starts valuing this like a streaming company, and it’s clear why VIAC is one of the best value stocks around. Low downside risk due to its beaten-down valuation, but high possible returns, if sentiment shifts back in a big way.

Viatris (VTRS)

Formed when Pfizer’s (NYSE:PFE) former Upjohn unit reversed merged with Mylan Labs, pharma company Viatris is primarily in the business of selling prescription drugs that have gone generic. Think brands like Lipitor, Viagra, and Xanax. As such, with dim growth prospects and highly-levered balance sheet, investors have not been too keen on it.

Since debuting late last year, VTRS stock has dipped from around $17.50 per share, to around $12.75 per share today. As a result, it’s trading at a super-low forward P/E ratio. Its very similar to the situation with another generic-focused drug maker, Teva Pharmaceutical Industries (NYSE:TEVA). Like with Teva, investors are doubtful that cost cutting and other efforts will make up for sagging sales.

However, while upside with Teva hinges entirely on cost-cutting/deleveraging, Viatris may have another path back to higher prices. As my InvestorPlace colleague Chris Lau wrote late last month, its pipeline of biosimilars could also help get things moving in the right direction once again.

Better yet, if recent talks result in a deal, it may merge its biosimilar unit with the biosimilar unit of India-based Biocon. This deal could also help move the needle for shareholders. With these catalysts in play, consider this value stock a buy while it remains out of favor.

Best Value Stocks: Western Union (WU)

With its valuable brand, and its large share of the global remittance market, in another era Western Union would be considered a great deep moat stock. But with fears that fintech will “disrupt” it out of business, the market today is treating it more like a cigar butt stock. Investors have bid it down, to a point where it now sports a single-digit P/E multiple (8.2x).

That said, reports of its pending demise may be greatly exaggerated. Sure, payment apps like PayPal’s (NASDAQ:PYPL) Venmo, and, the company formerly known as “Square,” Block’s (NYSE:SQ) CashApp seem like they’ll make Western Union’s business model go the way of the horse and buggy. Yet, as a Motley Fool commentator recently argued, the company’s wire-based money transfer service remains the more convenient option for the underbanked, or those without traditional bank accounts.

Put simply, this may enable the company to prevent going into terminal decline. Not only that, the venerable money transfer company is also at work to keep up the changing times. It’s important to remember the company is no stranger to transformation. After all, it started off as a telegraph company. Over time, it shifted to just money transfer, when its original business went the way of the dodo.

Low priced, with a 5.15% forward dividend yield to boot, going against the grain with WU stock could pay off.

On the date of publication, Thomas Niel held a long position in MO. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.