With the major indices struggling for traction this past week, it may be an opportune moment to consider undervalued stocks under $20. Yes, going the bargain route has its risks, no doubt about it. But you can also potentially enjoy a significant upside.

It may come down to shrewd positioning. Yes, the popular names will likely attract contrarian buying. Subsequently, the lack of the spotlight would lead to more corrections for those ideas that are less favored. However, so long as the fundamentals are positive, the underappreciated gems could make a robust comeback.

It’s a speculative concept to be sure. However, if you like raising your blood pressure, these are the undervalued stocks under $20 to consider.

Nomad Foods (NOMD)

Operating in the consumer defensive industry, Nomad Foods (NYSE:NOMD) specializes in packaged food products. Per its public profile, the company manufactures, markets and distributes a range of frozen foods in the U.K. and internationally. These products include frozen fish and ready-to-cook vegetables.

Fundamentally, Nomad may benefit from the trade-down effect. Let’s look at this narrative cynically. According to a CNBC report, inflation in the U.K. (Nomad’s key market) eased less than expected to 3.2%. That has raised concerns that accelerating consumer prices will experience the same style of stickiness that we have here stateside.

Here’s the thing. On a trailing-year basis, NOMD stock trades at 15x trailing-year earnings. That’s lower than the sector median of 18.18x. At the same time, fiscal 2024 earnings are projected to reach $1.89 per share, an improvement over last year’s $1.71.

The upside forecast is credible because consumers — hit by inflation — are likely to eschew going out to eat and cook at home instead. That would make Nomad a beneficiary of the trade-down effect. Therefore, I see NOMD as one of the undervalued stocks under $20.

Talos Energy (TALO)

Working under the hydrocarbon industry, Talos Energy (NYSE:TALO) focuses on the exploration and production (upstream) component of the value chain. Per its corporate profile, Talos engages in upstreaming oil, natural gas and natural gas liquids in the U.S. and Mexico. It also engages in developing carbon capture and sequestration.

Over the past five sessions, TALO stock lost 5% of its equity value. On a year-to-date basis, it’s down more than 7%. However, this performance clashes with broader relevancies. On multiple geopolitical fronts, potentialities exist for hydrocarbon supplies to be disrupted. With rising demand based on gradually increased economic activity as nations fully recover from COVID-19, hydrocarbon prices will likely rise. Cynically, this should be a positive for Talos.

Financially, TALO trades at a trailing-year earnings multiple of 8.3x, lower than the sector median of 10.95x. For the current fiscal year, experts believe the company will post earnings per share of 32 cents. That’s up from last year’s print of 23 cents. Therefore, TALO represents a credible narrative among the undervalued stocks under $20.

DHT Holdings (DHT)

Another player in the hydrocarbon space, DHT Holdings (NYSE:DHT) specializes in the oil and gas midstream segment. According to its corporate profile, DHT owns and operates crude oil tankers primarily in Monaco, Singapore and Norway. Further, the company offers technical management services. As of earlier this year, the firm commanded a fleet of 24 very large crude carriers.

Following along with the geopolitical angle, the flashpoints across the world present deep concerns for supply chain disruptions. Due to demand from nations that must import their hydrocarbons, critical commodity prices may rise. If so, that could be a positive for DHT stock. Shares slipped over the past five sessions, meaning it could be a shrewd time to open a position.

Right now, DHT trades at a forward earnings multiple of 8.46x. That’s lower than the sector median of 10.47x. It makes sense, given that analysts project DHT to produce EPS of $1.60 in the current fiscal year. That’s up substantially from last year’s print of 99 cents.

In addition, the high-side estimate clocks in at an EPS of $2.48. That’s not unreasonable based on geopolitics. Thus, DHT is one of the undervalued stocks under $20.

On the date of publication, Josh Enomoto did not hold (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.