Although the tail end of the third quarter brought some unwanted volatility to the market, forward-thinking investors might want to use this time to strategize undervalued stock picks. One of the primary benefits of this approach is that such securities may not have that much further to correct. That would appeal to risk-averse investors who might get rattled at the sight of steep corrections.

Another factor to consider for undervalued stock picks to buy is that the underlying businesses tend to be overlooked. Even if they are tied to relevant industries, some companies simply don’t attract Wall Street’s attention. However, astute market participants can use this dynamic to their advantage, acquiring positions ahead of the crowd.

While investors don’t like to see their portfolios stained with crimson ink, the silver lining is you don’t have to take the corrections lying down. Below are undervalued stock picks to buy to help get back on the right track.

Merck (MRK)

Arguably one of the most compelling ideas among undervalued stock picks, pharmaceutical giant Merck (NYSE:MRK) features an interesting narrative now that fears of the coronavirus pandemic are fading. On paper, MRK stock presents an enticing technical profile. On a year-to-date basis, shares are up 13%. For context, the benchmark S&P 500 index is down nearly 19% during the same period.

Statistically, Gurufocus labels MRK as “modestly undervalued.” Primarily, the company features a forward price-to-earnings (P/E) ratio of 11.7 times. This ratio compares favorably to the median forward P/E ratio of the drug manufacturing industry, which stands at more than 14 times. Moreover, Merck features robust profitability metrics. A highlight includes net margin of 29%. In contrast, the industry median is only 3.85%.

Fundamentally, Merck appeals to those seeking undervalued stock picks because the pharmaceutical world can now focus on non-Covid-19 related solutions. For example, Merck’s cancer drug Keytruda should generate more demand broadly as Covid infections fears subside, which previously prevented many people from seeking medical services.

BHP Group (BHP)

If you prefer a dash of cynicism in your undervalued stock picks, you might want to consider BHP Group (NYSE:BHP). An Australian multinational mining, metals and natural gas petroleum company, BHP brings many relevant resources to the table. Among them stand copper, nickel and potash. The latter resource gives away the reason I included BHP on this list.

First, let’s get some key stats out of the way. BHP stock represents a comparatively solid performer so far this year. Shares have “only” slipped 6%. Though nothing to write home about on absolute basis, BHP significantly outperforms the S&P 500.

Moreover, Gurufocus considers BHP to be “modestly undervalued.” Currently, its P/E ratio stands at 4.4 times, well below the industry median of 10.9 times. As well, the company features a price-to-free-cash-flow ratio of 5.2 times, below the industry median 11.7 times.

However, it’s all about the potash for me. Because of Russia’s invasion of Ukraine, a massive source of global potash supplies suffered disruption. That’s a net negative for the world, but a cynical positive for potash producers like BHP.

Vale (VALE)

A name that investors arguably should put on their radar, whether they specifically want undervalued stock picks or not, is Brazilian metals and mining firm Vale (NYSE:VALE). More significantly, the company represents the world’s largest producer of iron ore and nickel. Again, with the last commodity, you probably see where I’m about to go.

Still, let’s discuss the “paper” reasons why analysts consider VALE to be one of the best undervalued stock picks. According to Gurufocus, the mining firm is “modestly undervalued.” The company’s forward P/E ratio stands at 4.1 times. That’s substantially below the metals and mining industry’s median forward P/E ratio of 9.6 times. As well, the company commands excellent longer-term growth and profitability metrics. A key highlight is its net margin, which runs at 42.2%.

Now, let’s get into the fundamentals. According to CNBC, the cathodes used in modern electric vehicle (EV) batteries are at least 60% nickel. As EVs become further integrated into mainstream society, nickel demand will soar. Thus, VALE being down 7.3% so far this year is probably a great discount.

General Motors (GM)

Speaking of EVs, we’ve got to talk about General Motors (NYSE:GM). An American automotive icon, General Motors is doing a lot of things right. First, the company aggressively transitioned to the electrification of mobility. Therefore, it’s bringing back a lot of combustion classics like the Hummer, but in EV form.

The other factor to consider is that GM refuses to abandon traditional gearheads. With the strong debut of the eighth-generation Corvette, the automaker appeals to several demographic cohorts. Kudos to them, honestly.

On paper, GM is down 35% this year, which doesn’t reflect the positives management brings to the table. Just for that reason, you may want to consider shares as one of the undervalued stock picks.

To be fair, Gurufocus labels GM as “fairly valued.” Still, I’d like to point out the company’s forward P/E ratio stands at 6.4 times. In contrast, the vehicle industry median is 9.2 times. Ultimately, given GM is an iconic brand, consumers will likely gravitate toward its EVs instead of many other upstart products.

Citigroup (C)

One of the biggest financial institutions both domestically and internationally, Citigroup (NYSE:C) presents an interesting profile for undervalued stock picks. With so many changes occurring in the global markets and the world economy, people require excellent guidance. Citigroup’s wealth management arm could provide just that.

In the technical charts, C stock appears undervalued relative to the S&P 500. Since the start of the year, Citigroup shares lost 24%. To be clear, that’s for a reason. With economic woes impacting myriad industries, the financial segment suffered from the implied commercial activity loss.

On paper, Gurufocus considers Citigroup to be “modestly undervalued.” The company’s P/E ratio stands at 6.1 times, well below the industry median of 9.5 times. Further, Citi’s forward P/E ratio rates as 6.7 times, below the 8.4-times sector median.

Fundamentally, though, the contrarian bullish case for Citigroup centers on deflation. Anybody can guide investors to make money during an inflationary period because the purchasing power of the dollar declines; therefore, investors must do something with their funds.

However, deflation provides a guaranteed positive return just by doing nothing. Thus, it’s much harder to provide profitable guidance, which is where Citigroup’s experts should come in.

Northrop Grumman (NOC)

One of the world’s biggest defense contractors, Northrop Grumman (NYSE:NOC) features obvious implications with the war in Ukraine. When Russia made the decision to invade its neighbor, both U.S. and European forces rushed in to help Ukraine.

Now, on paper, NOC doesn’t appear to be an undervalued stock pick. Since the start of the year, Northrop shares have gained 25% of market value. That’s well above the major indices, which are deep in the red. In addition, Gurufocus labels NOC stock as “modestly overvalued.”

Still, it’s important to point out the company runs a P/E ratio of 13.6 times, below the sector median of 28.3 times. As well, Northrop features excellent longer-term growth and profitability metrics.

However, the fundamentals really do it for me. Along with Northrop providing support to Ukrainian resistance fighters, the massive uncertainties in Russia could lead to economic problems. That could translate to massive power gaps in areas the former Soviet Union controlled or influenced. In other words, it’s going to be busy times for defense contractors.

Micron Technology (MU)

Admittedly, Micron Technology (NASDAQ:MU) represents the highest-risk idea featured on this list of undervalued stock picks. Nevertheless, it’s hard to imagine its semiconductor specialty of data storage solutions will be deflated indefinitely. However, that’s the implication of the company’s market performance.

On a year-to-date basis, MU stock is staring at a staggering 45% loss. For context, as terrible as it is, the Nasdaq is “only” down 27% during the same period. However, for the extreme speculator, MU could be appealing. Again, broad demand for data storage seems to only go in one direction: up.

On paper, Gurufocus considers Micron to be “significantly undervalued.” That’s more like it. The tech firm features a forward P/E ratio of 6.1 times. That’s well below the industry median of 15 times. In addition, Micron rates highly against longer-term comparisons for growth and profitability.

If you have some funds earmarked for speculation lying around, MU could be an intriguing idea among undervalued stock picks.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.