With the equities space continuing to enjoy its blistering recovery from the doldrums of the Covid-19 crisis, fewer and fewer ideas exist that are considered genuine discounts. Nowadays, several of the desirable market ideas just seem overpriced. However, if you look around, there are still some promising enterprises that make up the ranks of oversold stocks to buy on the dip.

The ideas that comprise this category attract eyeballs for one main reason: humans love their discounts. Even those who are financially well off typically can’t resist the allure of getting more for their money. It’s like shopping in the grocery store and coming across a two-for-one deal of products you already buy anyways.

Why wouldn’t you take the discount? It’s essentially a gift. That’s roughly the same principle here.

Of course, red-stained securities are always liable for even more losses. However, some downtrodden names seem ready for a rebound, particularly because of their relevant businesses. With that in mind, below are oversold stocks to buy on the dip.

Baidu (BIDU)

Baidu (NASDAQ:BIDU) makes a great case for oversold stocks to buy on the dip thanks to its underlying innovations. To be sure, it’s understandable why the market doesn’t care for BIDU stock. Since the start of the year, shares have plunged more than 23%. The Chinese economy seems suspect, leading to an exit out of the arena. However, the company is also one of the world’s top internet technology firms.

What should really attract contrarians is that the company has invested heavily into artificial intelligence and large language models. Still, few want to give the time of day to BIDU, which suits speculators just fine. Right now, shares trade at 1.69X trailing-year revenue. That’s below the 2X multiple that was seen just in the first quarter. And it’s significantly below the 2.95X posted in Q1 2023.

Further, in the past four quarters, Baidu’s average earnings per share reached $2.94. In terms of earnings surprise, this performance translated to 26.23%. That’s impressive. For fiscal 2024, analysts are anticipate a slight dip in EPS to $11.21. On the top line, it sees modest growth of 2% to reach $19.34 billion.

Still, with the way the company has been performing, Baidu can surprise.

Ulta Beauty (ULTA)

I know that the consumer economy is struggling under the weight of inflation and high borrowing costs. Therefore, demand for many enterprises under the discretionary category faces significant pressure. However, Ulta Beauty (NASDAQ:ULTA) arguably deserves a rethink. As a beauty care specialist, it aligns with the experiential focus that has driven travel-sector-related demand.

Fundamentally, the forced quarantines that occurred during the worst of the Covid-19 crisis sparked pent-up demand for vacations and other social events and gatherings. So, I anticipate that Ulta Beauty would benefit a bit more from the retail revenge phenomenon. After all, it was the social mobility aspect that was denied during Covid.

Unfortunately, the market doesn’t quite see it that way. Since the year’s start, ULTA stock dipped more than 21%. Fine – but let’s also consider that in the past four quarters, the company’s EPS averaged $6.41. This translated to an earnings surprise of 4.08%.

For the current fiscal year, analysts see 3.2% sales growth to $11.56 billion. In the following year, revenue may rise by 6% to hit $12.26 billion. Given the aforementioned fundamentals, ULTA ranks among the oversold stocks to buy on the dip.

Kosmos Energy (KOS)

Specializing in the upstream oil segment of the hydrocarbon value chain, Kosmos Energy (NYSE:KOS) has struggled for traction this year. Since the beginning of January, KOS stock fell almost 22%. That’s ugly and there’s more going on than just a broader focus on clean and renewable energy sources. Instead, geopolitics may be playing a huge role in the undervaluation of KOS.

Essentially, Russia’s invasion of Ukraine could be having a detrimental impact on the part of the aggressor. Ukrainian forces have been attacking Russia’s oil refineries (downstream) in a bid to slow its invasion. As a result, Moscow is losing a key revenue stream. It’s got to make up for that loss by selling huge volumes of crude oil (upstream). Naturally, this dynamic has an impact on upstream specialists.

Here’s the thing: this geopolitical crisis can pivot in any number of ways. Further, the cooled tensions in the Middle East could easily reignite. That would surely boost demand for upstream companies.

For fiscal 2024, analysts believe Kosmos’ sales could hit $2.01 billion. If so, that would imply almost 50% growth. That seems quite reasonable given the circumstances. Thus, KOS is one of the oversold stocks to buy on the dip.

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.