3 Pullbacks You Should Consider Investing In

With the market trading near all-time highs, it's not always easy to find new investments, which can be frustrating. However, sometimes the market provides pullbacks in certain stocks, that may offer decent opportunities. This is exactly what has happened to three of the world's largest companies, so let's take a look and see if one could fit your portfolio's needs.

The nutrition giant
GNC Holdings (NYSE: GNC  )  is the owner and operator of GNC, or General Nutrition Centers, worldwide. It offers vitamins, nutritional products, and dietary supplements, as well as fitness equipment and accessories. The company currently operates 8,444 company-owned and franchised locations in 54 countries, giving it one of the largest footprints in the nutrition industry.

Source: GNC Investor Presentation.

The stock has been on downward slope since reaching its 52-week high of $60.98 on Nov. 27. The decline has happened for no legitimate reason; there have not been any earnings released, major downgrades of the stock, decreased outlook, secondary offerings, or insider selling, so it appears that investors are simply taking profits. There has, however, been a recent report alleging that vitamins and supplements have no true benefits, but I do not believe this will stop Americans from continuing to buy them; if this gains more traction and there is more of a public outcry, then I would revisit the allegations and take it more seriously.

Source: Yahoo! Finance.

GNC has fallen nearly 13% from its high and now trades at just 19.5 times its trailing-twelve-months earnings of $2.72. It's also trading at only 15.3 times its projected earnings of 2014. Since going public in 2011, GNC has traded at an average multiple of 22.06, meaning it is trading at a steep discount today.

I believe the stock could command a fair multiple of 20 throughout 2014, meaning it could trade upwards of $69, representing a 30% gain from current levels. I think GNC is one of the best investment opportunities in the market today, and you should consider looking deeper.

The face of healthy eating
America's transition to healthy eating has been led by Whole Foods Market (NASDAQ: WFM  ) . This company is the leading retailer of natural and organic foods in the United States and was the first national "Certified Organic" grocer. It currently operates 367 locations in the U.S., Canada, and the United Kingdom.

Source: Whole Foods 

The decline in Whole Foods' stock began after a weak earnings report on Nov. 6; where earnings beat by a penny, but revenue missed by $60 million. Negativity probably would have been minimal if this was just a mixed quarter, but the company then cut its outlook for 2014.

Earnings are now expected to be in the range of $1.65 to $1.69 per share on revenue growth of 11% to 13% versus previous estimates of $1.69 to $1.72 per share on revenue growth of 12% to 14%. All these factors caused Whole Foods to fall 8% after hours and 11.18% in the next trading session. Fortunately, or unfortunately, the weakness did not stop there.

Source: Yahoo! Finance.

Today, the stock sits at more than 20% below its 52-week high of $65.59 reached on Oct. 28. The mixed report was acceptable and the reduced outlook was minimal, so a large sell-off of 20% is a bit extreme. I believe Whole Foods will continue its expansion efforts and deliver on the reduced earnings in 2014, slowly driving its shares toward its 52-week high. If this happens, investors would accumulate a solid return of roughly 25.4%, which I believe will far outperform the overall market.

A well-know secret
Arguably, the most popular women's brand in the United States is Victoria's Secret and is owned by L Brands (NYSE: LB  ) . The company also owns Victoria's Secret PINK, Bath and Body Works, La Senza, and Henri Bendel, giving it exposure to several areas within the industry. Being home to several popular brands gives L Brands an advantage in today's very competitive retail environment.

Source: Fool Flickr Stream.

L Brands' stock began declining shortly after reaching its 52-week high on Dec. 2 and it kept falling for several reasons. First, on Dec. 5, the company reported that same-store-sales declined 5% in November compared to a 5% increase the year before. This did not cause a major hit, but it was enough to start the decline.

Second, nearly the entire retail industry was hit after investors realized the 2013 holiday season's promotional environment was more extreme than it had ever been before, which caused margins to implode. Finally, and worst of all, L Brands cut its fourth-quarter outlook on Jan. 9 and now expects to earn $1.60 per share versus previous estimates of $1.67 to $1.82.

Source: Yahoo! Finance.

After the steep decline, L Brands now sits over 17.5% below its 52-week high of $67.16. At current levels, the stock trades at just 19.8 times trailing-twelve-months earnings of $2.79 and 18.2 times 2014's earnings estimate of $3.03. L Brands has a five-year average price-to-earnings multiple of 21.4, meaning it is inexpensive at current levels.

However, even with it being inexpensive, you should still wait until after its next earnings report to consider initiating a position. With that said, it might make a great addition to any portfolio looking for retail exposure. 

The Foolish bottom line
GNC, Whole Foods Market, and L Brands have pulled back significantly from their respective highs. All three make strong cases for investment and pay healthy dividends, so each could easily outperform the market. Keep a close eye on these three industry giants, and consider initiating a position today or on any weakness going forward.

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