With Wall Street jubilant about avoiding a recession last year, investors may want to continue betting on the same horse, although here’s the thing: targeting undervalued value stocks may offer a more sensible approach. You don’t necessarily want to abandon your winners outright. However, it’s also risky to assume lightning will strike twice.

I’m not going to list all the heavily hyped names of 2023 – you already know them. But because these enterprises have performed surprisingly well, a possibility exists that they could leave you holding the bag. Instead, it might be prudent to have some exposure to undervalued value stocks. These are stable enterprises that just didn’t quite get the spotlight last year.

To provide more-informed ideas, I used Gurufocus’ value stocks screener to bring me compelling opportunities. From there, I used a combination of business relevance and financial metrics to determine what may be the top undervalued value stocks to buy.

Johnson & Johnson (JNJ)

One of the giants in the broader healthcare space, Johnson & Johnson (NYSE:JNJ) spun off its consumer products division last year. Now, it’s focused on its pharmaceutical and medical technology business units. Over the long run, that could be a wise move. Sure enough, the opportunity in JNJ is that Wall Street doesn’t quite see it that way. In the past 52 weeks, JNJ slipped almost 6%.

That seems a little harsh. For example, according to Acumen Research and Consulting, the global pharmaceutical market size reached a valuation of $1.5 trillion in 2022. Further, the sector could hit $2.8 trillion by 2032, representing a compound annual growth rate (CAGR) of 6.4% from 2023. Plus, KPMG notes that the medical device industry could rise by over 5% a year, hitting a valuation of $800 billion by 2030.

Looking at the financials, JNJ trades at only 12.06X trailing-year earnings. Just as well, its return on invested capital (ROIC) – which measures a company’s efficiency in allocating capital to profitable investments – clocks in at 16.2%. Thus, it’s one of the credible undervalued value stocks to buy.

Chevron (CVX)

At first glance, critics might argue that Chevron (NYSE:CVX) is one of the undervalued value stocks for a reason. Against a broader outlook, the rise of green and renewable energy sources presents questions for the hydrocarbon industry. More to the current circumstances, production cuts by major oil-producing nations haven’t quite yielded robust price movements higher.

Still, I’m a believer in the long-term case for Chevron and the broader oil and gas market. For one thing, you can’t divorce the scientific relevancy from investments like CVX. With fossil fuels commanding high energy density, this energy resource could be surprisingly relevant. As well, brewing geopolitical conflicts means that diversity of resources will likely play a huge role in energy security.

Looking at the financials, CVX isn’t the absolute most undervalued play to be honest. However, CVX does trade at a free cash flow (FCF) yield of 7.33%, better than the industry median 2.15%. Additionally, its ROIC comes in at 9.6%, above 68.54% of its rivals.

General Motors (GM)

An admittedly risky idea for undervalued value stocks, General Motors (NYSE:GM) will require some patience. It’s off to a choppy start in 2024, a continuation of the dynamic from last year. Indeed, in the past 52 weeks, GM stock dipped about 4%. However, at multiple points in the year, it was profitable against the January opener. However, the automotive industry suffered huge challenges.

Moreover, as General Motors aggressively pivots toward electric vehicles, some questions have emerged. With a sector-wide price war still in play, the whole EV ecosystem has suffered. Still, GM is in the trenches for the long run and I believe it has an advantage. Thanks to its myriad popular brands, the company has the opportunity to electrify them.

Look at what the company is doing with the Corvette E-Ray, which is basically an integration of combustion and electric-powered technologies. Probably, a plug-in battery Corvette may not be too far away. With GM trading at a lowly forward earnings multiple of 4.68X, it may seem like a value trap. However, the potential to pop certainly exists.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.