The stock market, much like the ebb and flow of tides, has its moments of highs and lows. In the vast ocean of S&P 500 stocks, there are some that currently find themselves in an oversold territory.

While this might raise alarm bells for the faint-hearted, seasoned investors often see this as an opportunity to secure valuable stocks at discounted prices.

In this article, we’ll use the relative strength index – RSI – to pin down oversold stocks. Typically, an RSI of around 30 means a stock is oversold.

Of course, indicators aren’t everything, so we’ll also explore underlying benefits that make each stock a buy today. Here’s a look at seven such oversold S&P 500 stocks that present a potentially lucrative buy-in opportunity right now.

Advance Auto Parts (AAP)

Advance Auto Parts (NYSE:AAP) crashed hard in June, falling more than 50% in one day after reporting rough financials.

But there’s a bright light on the horizon for the car parts retailer. Before the fallout began, AAP announced current CEO Tom Greco planned to retire by the end of the year.

Today, AAP’s board hasn’t yet named a replacement – and fresh blood might be the exact thing that turns the company around. 

Wall Street seems to think so, too. Last week research firm Wedbush reiterated its Neutral rating but pinned the stock’s fair value 15% above its current price. H

edge funds and institutional investors are also rotating into the stock, with companies doubling their current holdings on the current dip. AAP trades at a 0.38 price-to-sales ratio, which makes the stock a bargain at today’s valuation.

Although AAP certainly has a long road ahead, its current condition is definitely oversold. 

Dollar General (DG)

Dollar General (NYSE:DG), despite a seemingly recession-resistant model, has fallen nearly 34% since January.

Much of the stock’s trouble came from a lackluster financial report which, although the company reported a quarterly $2.38 EPS, fell below analyst estimates. Still, analysts remain upbeat and project a steep 20% upside from current pricing. 

As Americans become increasingly price sensitive, due in part to ballooning consumer credit card debt, companies like Dollar General become the go-to option.

Dollar General’s resiliency is notable, too, as the company boasts 31 straight years of sales expansion, including during 2008’s Financial Crisis and throughout the pandemic. With a solid outlook and a strong market position, Dollar General is another oversold stock investors should take notice of.  

Allstate (ALL)

No matter the economy, insurance isn’t something to skimp on. And Allstate (NYSE:ALL) is a primary player in the space. The company is down 20% this year despite a healthy policy portfolio.

To counter the poor performance, management is taking action. The company announced a new thrift-focused policy, stopping buybacks. Likewise, they’ve raised prices on some policies. The latter changes already have had some effects, as personal auto pricing adjustments pushed premiums up 6% over the past quarter. 

Analysts covering the company generally see the stock as a Hold, if not a Buy. No matter the rating, though, analysts across the board see the stock having substantial upside. Price targets average around $126, with the most optimistic pegging the stock’s fair value closer to $155.

Allstate definitely has a deep hole to dig itself out from but, with its industry positioning and inelastic product line, the stock is a definite deal at today’s pricing. 

PayPal (PYPL)

With a staggering 435 million customers, PayPal’s (NASDAQ:PYPL) foothold in the fintech arena is indisputable.

Unlike traditional value-driven banking stocks, PayPal doesn’t provide dividends and its price-to-earnings ratio is on the higher end compared to older banking institutions.

This leaves it straddling the line between being a high-growth prospect and a straightforward value proposition, leaving some investors confused about where the stock falls in a balanced portfolio.

But for investors keen on harnessing a brand balancing growth and maturity, PayPal is a commendable choice. Stability is the watchword with PayPal’s financial metrics.

Though earnings took a slight dip earlier in the month, the outcomes were within expectations, and the company continued its upward trajectory, albeit at a more measured pace.

For stakeholders seeking reassurance, PayPal’s recent report offers solace with a 7% year-over-year uptick in revenue, a 2% margin increase, and an 11% reduction in non-operating expenses. These show PayPal is here to stay, and it’s recent venture into stablecoin offerings prove the company is at the fore of today’s financial markets. 

American Tower Corp (AMT)

American Tower Corp (NYSE:AMT) is a REIT investors should consider when diversifying their portfolio, but the cell tower company’s stock is down 18% this year despite positive news across the board.

The company owns more than 220,000 towers worldwide and is still expanding. Given cell service’s indispensable nature in today’s connected world, AMT is positioned to remain resilient against the broader real estate market’s ups and downs.

With the rise of the “Internet of Things,” the importance of cell towers is only poised to grow. This makes AMT a REIT that’s synonymous with market stability.

American Tower’s global presence is also noteworthy in its ambition. Not only does it have operations in developed nations like the U.S., but it also has a footprint in burgeoning markets such as Africa. As these emerging regions witness a surge in digital connectivity, they open up vast growth avenues for the company.

As with most REITs, American Tower presents an attractive dividend. But what sets it apart is the cell tower industry’s profitability, which has empowered the company to raise its dividend consistently through the last 20 distribution cycles.

This track record of reliability underscores American Tower’s capability to thrive, even in challenging economic landscapes.

Extra Space Storage (EXR)

As Americans downsize, personal storage companies like Extra Space Storage (NYSE:EXR) are positioned to become a household spending staple. The stock is down 12% this year, though, despite a strong financial position.

Critically, for investors unable to stomach this month’s volatility, Extra Space Storage stock’s beta is only 0.56. This means the stock is fairly stable compared to the wide market, making it a viable defensive play for nervous investors.

The company’s price-to-earnings-growth ratio is also around 6, indicating undervaluation at today’s prices. 

Self-storage demand grew to more than 1.7 billion square feet this year, indicating healthy forecasts for EXR’s core operations. As 20% of Americans currently use some form of self-storage and 15% more expect to in the near future, Extra Space Storage is ready to capitalize on growing demand, and it’s oversold nature positions it for a sharp reversal. 

Etsy (ETSY)

Etsy (NASDAQ:ETSY) is an online retailer that, despite economic unease, remains dominant in its core customer segments as more consumers cycle into online-only shopping trends.

Today, Etsy boasts an impressive 89.9 million active buyers and 5.9 million active sellers. Management attributes its robust user engagement to its special product range that, simply put, cannot be found in traditional brick-and-mortar shops or even big-box online retailers. 

Etsy is also expanding that unique product line, indicated by recent acquisitions of Reverb and Depop. Both will further enhance Etsy’s market reach and diversify its revenue. Ultimately, Etsy is here to stay. With its finger on the pulse of the next generation of American consumers, it’s well-positioned to expand its footprint as an oversold growth stock. 

On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.