The stock market keeps rolling, with the S&P 500 surging almost 4% in the past month. Indeed, a big correction seems overdue at this point, given the sheer momentum and the fact that we haven’t had a full correction since last autumn. In any case, those looking to time an exit before the correction may miss an extension of the strength we’ve seen.

Undoubtedly, the mega-cap tech companies have continued to be the hot topic on Wall Street. Though the names still have enough momentum and growth potential to power more gains for new investors, one can’t help but notice the degree of multiple expansion experienced by many momentum plays in just the past few weeks alone.

If earnings and sales accelerate accordingly, perhaps the multiple expansion is nothing to ring the alarm bell over. However, betting in the face of higher expectations can be tricky, not to mention against the principles of some value investors. In this piece, we’ll concentrate on undervalued stocks poised for longer-term appreciation.

Walmart (WMT)

Walmart (NYSE:WMT) is at a fresh all-time high, just north of $70 per share, after surging close to 32% year-to-date. Undoubtedly, WMT stock has some serious momentum behind it. However, it still looks cheap if you view it as more of a tech-driven retailing play and not just another big-box retailer benefiting from transitory tailwinds brought on by inflation.

Indeed, if you are battling with inflation as a consumer, there is no better place to shop than one that offers everyday low prices and massive sales events!

As Walmart continues leveraging customer data to improve the experience while focusing on enhancing the in-store experience, it seems like the company’s eager to prove it’s not just a place to save money; it’s also a place to save time.

At writing, WMT stock still seems too cheap at 30.1 times trailing price-to-earnings (P/E) when you consider how far it’s come in the past few years and how resilient it can be once the market finally backtracks.

Domino’s Pizza (DPZ)

Pizza play Domino’s Pizza (NYSE:DPZ) is fresh off a 7.5% plunge off its two-year highs of around $533 per share. This dip seems mouth-watering for investors seeking growth stocks at a reasonable price. At 32.3 times trailing P/E, DPZ stock is not the cheapest quick-serve restaurant name in the world. However, it is among the most intriguing as the company continues to pursue growth.

In addition to expanding the store count, Domino’s is also looking to nudge same-store sales even higher by introducing new products, bolstering the loyalty program, and improving the already best-in-class delivery speeds. The firm is also operating very effectively, providing considerable margin upside over the long run.

At this pace, it seems likelier than not that shares eclipse new highs at some point in the second half. Sure, there’s a slight premium on shares, but a larger one may be warranted.

Progressive (PGR)

Progressive (NYSE:PGR) is an insurance firm that’s been reporting some exceptional numbers of late. The stock is on a hot start to the year, up 30% year-to-date. And though PGR stock has been stalling since March, I do view the sideways consolidation as more of an opportunity to enter than an exit, especially as the firm pursues ambitious growth drivers.

Apart from being an efficient operator with an enviable underwriting track record, the company has also embraced new technologies to get through the prospective customers. Notably, Progressive has been making use of generative AI to bring a more personal touch to its ads.

Perhaps it’s not Progressive’ low rates that make it a cut above many of its insurance peers, it’s the tech-savvy. With PGR stock trading at just 21.5 times trailing P/E, perhaps value hunters should give the name a second look before its next major move, one that could be higher.

On the date of publication, Joey Frenette 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.

On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.