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The sell-off of Nasdaq technology stocks has turned into a marginal surrender to many once-hot names such as DocuSign.

Investors may not want to worry about volatility because they look forward to relaxing this holiday season. Do not be afraid. Caterpillar (CAT 0.51%), Huntsman (HUN -0.84%) and Chemours (CC -1.91%) are three value stocks that can add stability to your investment portfolio. This is what makes it worth buying for everyone now.

Daniel Foelber (Caterpillar): Caterpillar will have a grand plan in 2021: extensive vaccination, economic recovery, low interest rates, and the industrial sector that hopes to regain a foothold are compounded into a tightly coiled spring. However, supply chain issues, rising raw material costs, and epidemics that will not go away have weakened Caterpillar's actual performance.

Caterpillar recognizes that the economic expansion is not yet in full swing. The result was good, but it did not meet expectations. Although in this context, Caterpillar still makes a lot of money, but its stock price has underperformed the market. This dynamic brought Caterpillar's price-to-earnings ratio (P/E) to 21. Of course, this is still higher than Caterpillar's historical level, which is even more impressive considering the company's performance is somewhat weak. But it is far below the market average.

The good news is that many of the factors that contributed to Caterpillar's good year are still at play to a large extent. The oil and gas industry was a surprise for Caterpillar, supporting its energy and transportation sectors. The company's mining department directly benefits from customer demand to increase supply. The guidance suggests that free cash flow (FCF) and revenue growth are moving in the right direction.

As a cyclical company, Caterpillar's performance depends to a large extent on the overall economy. However, through all this, the company has increased its dividend for 27 consecutive years, making it one of the few cyclical dividend aristocrats. With its current 2.3% dividend yield and reasonable valuation, Caterpillar now looks like a good stock to buy.

Lee Samaha (Huntsman): In a seemingly expensive market, it’s a bit surprising for investors to find that stock prices are trading below 9 times expected earnings in 2021, but this is the case with Huntsman, a chemicals and materials company This situation.

Of course, there is usually a reason for such a low company valuation. For Huntsman, this may be a combination of two factors: its recent underperformance in profit margins compared to its peers, and concerns about the unsustainable current profitability.

Finally, the recent earnings season was flooded with news from companies warning of soaring material cost inflation. Huntsman manufactures many of these materials. The worrying thing is that these price increases are unsustainable, and when the market cools, Huntsman's earnings will also cool.

For example, management reports that compared to the same period in 2020, revenue for the first nine months of 2021 has increased by 41%. Huntsman's largest division, polyurethane (used in insulation, automotive, construction, spray foam, etc.), reported that the average selling price in the first nine months has risen by 31%.

The market is right to be cautious about the sustainability of Huntsman's pricing, but perhaps it is too harsh. After all, it is difficult to predict future pricing trends. In addition, this is not just about favorable end markets. The company has made significant progress in moving away from more commodity types to support downstream businesses with higher profit margins.

Huntsman also has a real opportunity to increase its profit margins with its peers:

HUN operating margin (TTM) data from YCharts.

All these add up to an exciting value proposition that the bargainer may not be able to give up.

Scott Levine (The Chemours Company): Now that the turkey and fillings have been eaten, it's time to buy some holiday gifts. To further expand the budget—perhaps to allow us to buy an extra gift or two—investors are looking for deals on the stock market. Since the Standard & Poor's 500 Index often lingers near historical highs, the options for value-oriented investors seem to be limited. However, there is one leading chemical stock that deserves careful study: Chemours.

The company is a leading producer of titanium dioxide, a compound that is supplied to customers in the apparel, agriculture, and packaging industries. Chemours also provides a variety of other specialty chemicals, such as Freon for refrigeration and Teflon for military use. Because its customer base spans such a wide range of industries, Chemours has reduced the risks associated with a sharp decline in any one industry, thus affecting Chemours' business.

Like many other companies in the past few months, Chemours is also facing supply chain challenges-management has raised this issue many times during the company's third-quarter conference call. It is likely that this factor caused investors to withdraw from their positions. However, the sell-off seems premature: Chemours expects a strong end by 2021. In fact, it has raised its FCF guidance from approximately US$450 million to approximately US$500 million.

But it's not just the 2021 guidance that shows Chemours is a wise investment choice. The company's industry leadership and history of success show that it will be able to weather current headwinds and flourish in the future.

Currently, Chemours' share price is about 23% below its 52-week high of $29.82, but there are better signs of how cheap the stock is at its current valuation. On the one hand, Chemours' operating cash flow is approximately 5.2 times, which is lower than the five-year average multiple of 7.6 for the stock. Investors who like the P/E ratio will find another proof of its cheap valuation: Chemours’ current P/E ratio is 12.8 times—a significant discount to the S&P 500’s P/E ratio of 28.8.

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*The average return of all proposals since its establishment. The cost basis and return are based on the closing price of the previous market day.

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Calculated based on the average return of all stock recommendations since the launch of the stock advisory service in February 2002. Return as of February 6, 2021.

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Since 2002, time-weighted returns have been calculated. The volatility distribution is calculated based on the past three years of the standard deviation of service investment returns as of January 1, 2021.

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