These 10 stocks trailing the market's record run may soon catch up, Jefferies says

Published Thu, Feb 23 201711:06 AM EST

With the market reaching records almost on a daily basis, some investors may worry they missed out on the rally. Jefferies said there are still compelling investment opportunities in stocks that lagged the market this earnings season and shared a list of its favorite ideas to its clients. "Major US indices are at all-time highs and S & P earnings have beaten estimates again, but there are many single names that haven't fared as well," the firm's research team wrote Thursday. "The release of bad news, especially when it pertains to a temporary issue, can provide a good tactical opportunity to buy a stock. Bad news can help to de-risk shares, reduce what may have been crowded positioning and remove an overhang." The team identified 10 Jefferies buy-rated stock ideas, where analysts are confident in the long-term fundamentals and where the company underperformed the S & P 500 during the recent earnings season. Here are the 10 names that made the Jefferies' recommended list. Source: FactSet "The company reported F3Q revenue that beat expectations, though shares saw weakness due to underwhelming EPS driven by weak operating margins," analyst Amit Singh wrote. "The stock currently trades roughly in line with the S & P on a P/E basis and we believe consistent execution could see shares trade up to the industry's typical 20% P/E premium to S & P. ... Moreover, almost all of the revenues and cost of revenues are U.S. based, implying the company would not be penalized by any border adjusted taxes." Singh has a $41 price target for Booz Allen Hamilton , representing 15 percent upside from Wednesday's close. Source: FactSet "Chevron's 4Q results missed our estimates by a large margin, largely due to a big corporate expense and a prolonged turnaround at the Richmond refinery," analyst Jason Gammel wrote. "We still view CVX as best positioned in the integrated sector. Chevron should benefit from a significant inflection in its cash cycle as major capital projects reach start-up, capex falls dramatically and production growth from these high-margin projects increase overall cash generation." Gammel has a $141 price target for Chevron , representing 28 percent upside from Wednesday's close. Source: FactSet "The company unexpectedly pre-announced disappointing 4Q results, citing late holiday consumer shopping as driving an elevated promotional environment. We continue to believe; however, that the company is effectuating its turnaround, so stock weakness related to disappointing 4Q results provides an opportunity, in our view," analyst Trevor Young wrote. "We also believe that Mattel's new CEO coming from Google is a purposeful move to further its efforts in tech/connectivity, incubate innovation and modernize the traditional toy manufacturer." Young has a $32 price target for Mattel , representing 24 percent upside from Wednesday's close. Source: FactSet "The company reported in line 4Q results, but noted elevated outflows in the quarter, leading to share underperformance," analyst Daniel Fannon wrote. "We believe that the backdrop for US active management could see softening headwinds in '17 for the first time in several years. As a predominantly US focused asset manager, broad improvements for the domestic industry will disproportionately benefit TROW." Fannon has an $84 price target for T. Rowe Price , representing 18 percent upside from Wednesday's close. Other companies on Jefferies' recommended list included Ball , CA , Freeport-McMoRan , Gilead Sciences , International Paper and Newell Brands .

A young girl plays with a Mattel Barbie doll in Tiskilwa, Ill.

Daniel Acker | Bloomberg | Getty Images

With the market reaching records almost on a daily basis, some investors may worry they missed out on the rally.

Jefferies said there are still compelling investment opportunities in stocks that lagged the market this earnings season and shared a list of its favorite ideas to its clients.

"Major US indices are at all-time highs and S&P earnings have beaten estimates again, but there are many single names that haven't fared as well," the firm's research team wrote Thursday. "The release of bad news, especially when it pertains to a temporary issue, can provide a good tactical opportunity to buy a stock. Bad news can help to de-risk shares, reduce what may have been crowded positioning and remove an overhang."

The team identified 10 Jefferies buy-rated stock ideas, where analysts are confident in the long-term fundamentals and where the company underperformed the during the recent earnings season.

Here are the 10 names that made the Jefferies' recommended list.