Some stocks trade at cheap valuations for a reason, whether that's temporary setbacks, a shift in consumer preferences, or simply a company that has failed to adapt to the constantly evolving world. But sometimes stocks trade at a cheap valuation because Wall Street has overlooked them or investors have yet to realize the future potential the companies possess. Three Motley Fool contributors believe that Ascena Retail Group (ASNA), Skyworks Solutions Inc. (SWKS -1.55%), and The Travelers Companies (TRV 1.74%) are three top value stocks to buy right now. Here's why.

A forgotten retailer

Jeremy Bowman (Ascena Retail Group): One deep value stock that's been popping up on my radar recently is Ascena Retail Group. You may not have heard of Ascena, but chances are you know its subsidiaries. The company owns Ann Taylor, Lane Bryant, and Justice, among other chains.

Shares of Ascena have been anathema to investors for much of the last five years as the stock has fallen 79% in that time. However, the stock seemed to hit an inflection point earlier this year as the company's performance started to improve. Shares bottomed out at $1.69 earlier this year and have more than doubled since then as the company has returned to comparable sales growth and its bottom line has increased. 

In its most recent quarterly report, which came out Sept. 24, Ascena posted companywide comparable sales growth of 4% with sequential improvement in all of its seven brands, and positive comps in every chain except Dressbarn, where comp sales improved sequentially from -14% to -5%. Adjusted earnings per share rose from $0.05 to $0.07.

Even with the stock rallying 76% year to date, it still offers deep value, as the company has nearly 5,000 stores, which are valued collectively at just $200,000 each. On a price-to-sales basis, the stock is valued at just $0.12, much cheaper than comparable retailers.

Management plans to shutter about 200 stores this year as part of a plan to cut $300 million in costs, which should help the bottom line, and strong retail sales recently have lifted nearly all boats in the industry, a positive sign heading into the holiday season. If comparable sales can continue moving higher, Ascena's profit and stock price could surge over the coming quarters.

A stock for the future

Daniel Miller (Skyworks Solutions): While there are few certainties in the rapidly evolving world around us, it seems safe to say that connectivity will be a growing part of the future. That could be connectivity between a consumer's smartphone device and their vehicle, or any number of smart-home products, among many other applications. And if you believe connectivity is only going to expand in the future, investors should take a look at shares of Skyworks. 

Skyworks develops semiconductors for a number of applications across markets that include aerospace, automotive, broadband, smart homes, medical, military, and many others. Essentially, the more the world uses devices for data, the better the business opportunity for Skyworks' products. The good news is that global data traffic is booming. Global data traffic is expected to jump from 16,800 petabytes per month in 2017 to 75,200 petabytes per month in 2021, a robust 45% compound annual growth rate.

For investors, there are two intriguing catalysts in the near future: 5G and connected vehicles. Diving into 5G first: As the telecommunication industry develops 5G wireless technology, the content and cost in smartphones and other devices will increase. In fact, wireless content from 3G to 4G checked in at $8 and $18 per device, respectively, but that's expected to jump to $25 per device with 5G. If and when Skyworks capitalizes on the shift to 5G, it should boost its top- and bottom-line performance. Switching gears to Skyworks' connected car opportunity, it's expected that 73% of vehicles will ship with cellular connectivity by 2024. In fact, the connected car market is expected to jump from a $0.3 billion projected market in 2018 to $1 billion by 2024, and Skyworks is positioned to take advantage of that growth.

Man holding a smartphone in a connected car.

Image source: Getty Images.

Currently, Skyworks trades at a cheap 11.7 times forward price-to-earnings ratio, and sees it as 18% undervalued, giving investors a chance to start a position in a top value stock at a reasonable price. If Skyworks continues to innovate and can capitalize on opportunities as 5G technology expands and connected cars become more common, among other business catalysts, long-term shareholders could be well rewarded.

This insurer is simply cheap

Jordan Wathen (The Travelers Companies): Slow-growing insurance businesses are far from exciting, but when purchased at a reasonable price, the returns they can generate for investors can certainly get your blood pumping.

The Travelers Companies makes its money primarily by underwriting insurance for commercial clients in the middle market -- companies with 50 to 1,000 employees. Because commercial insurance policies tend to be more specialized, its clients can't easily shop around for the best rate (all contracts are different, after all), allowing for more pricing power and higher renewal rates. 

A conservative underwriting culture shows through in its underwriting results. Travelers generated an underwriting profit in each of the last five years, delivering a sub-90 combined ratio in three of the last five years. 

Insurers often get into trouble chasing growth for growth's sake, but Travelers' historical share count shows the company's focus on generating the best shareholder returns. During the 2008 financial crisis, it aggressively repurchased stock, slashing its share count from 585 million shares at the end of 2008 to roughly 393 million shares by the end of 2011. 

It's the nature of the insurance industry that profits will ebb and flow somewhat unpredictably, driven by fickle things like the weather, gasoline prices, and interest rates. But shares trade for about 12 times what one could reasonably expect the business to earn over an "average" year, in which there are no outsize losses. At that price, Travelers is a value stock to buy and hold for the long haul.