The stock market continues to trek higher, setting new highs on a regular basis. But not everyone is cheering. The S&P 500's cyclically adjusted P/E ratio, also known as the Shiller P/E ratio after Nobel Laureate Robert Shiller, is now at its highest mark ever, save for the run-up during the dot-com bubble. In other words, the stock market is relatively expensive right now, which makes it more difficult to find good value. 

Even though stock price alone doesn't tell investors anything about whether an investment opportunity provides good value, there are a few stocks under $10 worth a closer look in this overpriced market. Here's why Brazilian oil giant Petrobras (PBR -0.88%), genetic-testing leader Invitae (NVTA -72.22%), and solar panel manufacturer SunPower (SPWR -1.02%) have a lot to offer long-term investors despite near-term challenges.

An offshore oil platform in Brazil.

Image source: Getty Images.

Forgotten oil major

Brazil is home to some of the largest oil reserves in the world, thanks to the discovery of massive offshore deposits holding tens of billions of barrels of petroleum. In addition to impressive volumes, the offshore oil promises to be competitive at prices of $40 per barrel or less. Petrobras, the state-owned oil company, should be first in line to benefit.

The nation has wisely opened its offshore riches to international investments -- a move that will bring in the much-needed capital and help Petrobras to clean up the worst balance sheet among all oil supermajors. That has been the major focus of the state-owned energy giant in the past two years. Through a combination of asset sales, improved operational efficiency, and organic growth, the strategy has been proved to work -- so far.

Petrobras has managed to post positive EPS in each of the past four quarters, slashed debt 7% in the last 12 months, and maintained the industry's best cash flow through it all. Continued progress should allow the stock to return to its former greatness, but this won't be an overnight success story. 

There is one notable concern for Brazilian oil production that Petrobras investors need to consider: downstream facilities. The amount of infrastructure needed to store and refine the influx of offshore oil simply doesn't exist. Worse, Brazil's geography is such that the jagged cliffs on the coast are rarely interrupted by flat land that could host major petrochemical clusters. The lack of downstream infrastructure -- and the economic and technical challenges to building it -- could stunt international investment in the oil deposits, and therefore Petrobras' growth. It's one thing investors need to watch as they bet that the turnaround will gain momentum.

A businessman drawing a yellow step chart showing growth.

Image source: Getty Images.

Powering the genomics revolution

Invitae stock would have been above $10 per share had it not been for significant dilution in the past two years. Since the beginning of 2016, the stock has gained just 6.5%, although the market cap has increased 74.5% in that period. Such is the price of funding triple-digit revenue growth. 

For the first nine months of 2017, revenue totaled $42.8 million, which may not seem like much, but it represented a 157% increase from the year-ago total of just $15.8 million. How is that possible? The company is championing the next-generation business model of genetic testing, a platform supported by the volume of tests sold, not the price of each test. That's what it will take to realize the vision of individualized medicine, a world where a genetic tests happen with the frequency of an annual physical. 

So, while painful for shareholders, dilution through share offerings has been the easiest way to grow the genetic-testing platform and capture market share. The strategy has worked, and Invitae's top line is growing at a ridiculous clip, but profits could remain elusive for the foreseeable future. But if the business gets within striking distance of profitability, then it could quickly become an epic growth stock.

A worker installing solar panels on a rooftop.

Image source: Getty Images.

Rebounding solar leader

The past three years haven't been very fun for SunPower shareholders as the company -- and solar industry at large -- made difficult decisions to better position itself for the long haul. That included rebalancing on multiple fronts, including adjusting manufacturing capacity, altering product portfolios, and shifting gears on large-scale projects. But the efforts could be on the cusp of paying off.

The company's laser focus on residential and commercial customers promises to create a long-term foundation in the high-growth American solar market. When coupled with the highest-efficiency panels in the industry and soon-to-be coupling of rooftop solar and energy storage solutions, SunPower's future once again looks bright. In fact, half of the company's 2018 commercial installations are expected to include storage products. 

That could be a huge differentiator for SunPower -- already the largest commercial player -- for years to come, with major implications in the battle for residential rooftops, too.

Why? Consider that energy storage could greatly increase the value of solar installations, but no company has yet hit the right scale or economic price point to carve out a lead. The first provider to successfully make inroads in the solar-plus-storage market could stand to capture a long-term advantage, especially considering that scale -- which provides more data to optimize algorithms for each unit -- will be crucial for gaining an edge that competitors simply won't have. In addition, solar-plus-storage offerings are expected to be higher margin than solar-only ones -- and the return to profitability can't come soon enough for SunPower shareholders.

What does it mean for investors?

These three stocks under $10 per share are great in their own right, even if they each face near-term obstacles, although none are existential. Even if it takes a decade for Brazil to build out refining capacity -- currently under way in the northernmost state -- Petrobras should benefit from the lessons it has learned and taken to heart by hitting rock bottom in recent years. A cleaner balance sheet, higher margin, and a smaller and more focused business are all in store for investors.

Invitae's biggest problem is nothing new for high-growth stocks: the eternal "when will the business be profitable?" question. It's difficult to turn down a company growing its top line at triple-digit clips, which is something that could be possible for at least another calendar year. Meanwhile, SunPower took its lumps in recent years, but it could be poised to gain long-term traction with its new business model and growth strategy.

Simply put, these are three great stocks under $10 that should, at the very least, be on every investor's radar.