Value investors are always hunting for high-quality companies that are trading at bargain prices. So which stocks do we think they would find attractive today? We asked that question to a team of investors, and they highlighted e.l.f. Beauty (NYSE:ELF)Best Buy (NYSE:BBY), and Ulta Beauty (NASDAQ:ULTA)

Letters held up by many hands to spell the word discount

Image source: Getty Images.

Beauty is in the eye of the beholder

Rich Duprey (e.l.f. Beauty): Despite beating top-line Wall Street estimates, e.l.f. Beauty was battered following a report by analysts at Jefferies that said Hispanic customers weren't buying as much makeup this year as they had in the past, and around 24% of e.lf.'s customer base is Hispanic. The possible reason for the lack of spending was said to be fears over immigration policy.

The spending portion seems to be in agreement with findings by Nielsen that although Hispanic consumers have increased their so-called fast-moving consumer-goods spending by 0.6% this year, sales in beauty care were down year to date, as they also were in dairy, meat, and general merchandise. e.l.f. Beauty's stock dropped 16% in one day and is down 40% from its 52-week high.

The market seems to have missed the other part of the Jefferies analyst note that said this was probably just a temporary aberration and could translate into higher sales later in the year. e.l.f. itself reiterated its outlook that it expects to see strong sales for the rest of the year, as well as expansion in gross margin.

With its shares depressed and analysts still anticipating it will be able to grow earnings at a 25% clip annually for the next five years, this is a value stock that wise investors may want to pick up.

Retail at a discount

Demitri Kalogeropoulos (Best Buy): Best Buy shares are up sharply this year, yet the stock still looks like a relative value. It sports a price-to-earnings ratio below 15, compared with 24 for the broader market.

Yes, this retailer is exposed to major risks around a contracting industry. There's also the threat of price-based competition from online merchants to worry about. However, the business is holding up well through that disruption. Best Buy's recent quarterly report showed healthy growth trends, both in store and online, as comparable-store sales gains jumped to a 5% pace that implies rising market share. 

Investors shouldn't count on seeing such a high rate of growth continue. This past quarter's figures probably benefited from the closing of a key competitor, hhgregg, and it's possible that the same trends will sink Best Buy, too.

There's no evidence of that yet, though. Instead, the company in late August raised its full-year comps outlook to 4% from the prior 2.5% target. CEO Hubert Joly and his executive team are optimistic that consumer demand for tech products will stay healthy, especially over the coming months as innovative new devices hit the market in preparation for the holiday season. That's a volatile time for any retailer, but Best Buy has a good shot at making it through the holiday quarter with solid growth momentum, healthy finances, and an improving market position.

A growth stock at a value price

Brian Feroldi (Ulta Beauty): Imagine a retail stock that just reported the following results:

  • Sales up 21%, beating analysts' estimates. 
  • Earnings per share up 27%, beating expectations.
  • E-commerce sales up 72%.
  • Same-store sales growth of 12%.
  • Gross margins on the rise.
  • A decrease in shares outstanding.

What would you expect to happen to the company's stock following this report? Believe it or not, Ulta Beauty just reported these fantastic numbers and its stock promptly fell by 10%. What's even more amazing is that its shares were already trading near a 52-week low before the drop.

What can explain the disconnect? While there are a few possible explanations for the fall, the most likely answer is that Wall Street is worried about increasing competition. Companies including Macy's, Wal-Mart, and even Amazon.com are looking to step up their game in the luxury beauty market, which threatens to slow Ulta's growth trajectory. Traders seem to be taking a shoot-first, ask-questions-later approach to Ulta's stock.

While it would be a mistake to ignore the competition, I believe Ulta's results prove that the company is capable of holding its own in an intensely competitive marketplace. What's more, there is still plenty of room left for store growth in the U.S. -- to say nothing of the international opportunity -- and many consumers like to sample beauty products in person before giving them a try. When combined with the company's in-store salon services, which can't be replicated online, I'm confident that Ulta's long-term story is still very much intact.

With shares now trading around 23 times forward earnings, Ulta is a great growth stock trading at a reasonable price. That makes right now a great time for growth-focused investors to consider getting in.

Brian Feroldi owns shares of Amazon. Demitrios Kalogeropoulos has no position in any of the stocks mentioned. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Ulta Beauty. The Motley Fool recommends e.l.f. Beauty, Inc. The Motley Fool has a disclosure policy.