The Motley Fool

Your instant 6 share value portfolio

When it comes to seeking out opportunities in corners of the market that have the potential to harbour undervalued stocks, three sectors jump out: consumer discretionary (otherwise known as retailers), mining services and IT services.

These sectors have all experienced significant headwinds and many companies’ earnings have been squeezed. While this scenario will scare many investors away, it can also be where some of the best opportunities lie.

Sometimes, when it comes to investing in battered and bruised sectors, a ‘basket’ approach to diversify your portfolio can be the best way to go. Here are two stocks from each sector which appear particularly interesting for investors looking to seek out value.

Super Retail Group Ltd (ASX: SUL) and Dick Smith Holdings Ltd (ASX: DSH) have both been lagging the broader S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO), but as major market players in their respective retailing segments, their long-term profiles hold appeal.

Bradken Limited (ASX: BKN) and Seven Group Holdings Ltd (ASX: SVW) have suffered from the sell-off in mining services stocks. Both companies have compelling business models which allow them to maintain decent levels of revenues based on commodity volumes rather than price, which could see them perform better than many of their peer group.

Oakton Limited (ASX: OKN) and Data#3 Limited (ASX: DTL) have, like most of their sector peers, been negatively hit by the decline in IT spending. At some point businesses will have no choice but to spend funds on upgrading their technology hardware and software, which ultimately bodes well for the longer term outlook for these two firms.

NEW! The Motley Fool's #1 Dividend Pick

One of the benefits of buying 'value' stocks is they often pay above average dividend yields; this is indeed the case for many of the six stocks listed above. It's also the case for the following TOP DIVIDEND STOCK. Top Motley Fool investment advisor Scott Phillips has just named his #1 dividend-paying stock for 2014-2015. With solid growth prospects and a fat, fully franked dividend, this ASX stock could be a huge winner for your portfolio. Discover the name and code FREE by clicking here now.

Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

NEW. Five Cheap and Good Stocks to Buy in 2019…

Our Motley Fool experts have just released a brand new FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.8% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.