Last week turned out to be quite turbulent for stocks as familiar fears of a rate hike, sluggish global growth and the slump in oil continued to stalk markets. The unfortunate Paris terror attacks on Friday are likely to give markets another short-term scare, adding fuel to the fire.

Investors’ knee-jerk reaction to these deadly terror attacks and other "shocks" might extend losses for Mr. Market in today’s trade. However, the fallout will likely be quite short lived.

In fact, the current weakness in the market might be simply technical, if you reflect on the fact that the recent 13% bounce for stocks came too fast and too easy. Hence, this might just be a brisk round of profit-taking that retests investor convictions. And with the fundamental outlook remaining unchanged, the markets look set to recoup losses and go back up in no time at all.

Till then, we see a nice opportunity for investors to capitalize on the dip and stock up on some blue-chip stocks. However, the investing universe seems endless, with different investing styles, fundamental strategies and technical approaches. So what should investors go for? Well, as they say, it’s complicated. Or is it?

Does Size Matter?

There is that question again — whether to go for large caps with arguably limited price gain prospects, or to go for small caps, which most often have immense growth potential.

If we reassess the current economic scenario, we see that the Fed is going to hike interest rates at some point in the not-too-distant future. That is likely going to kick off a cloud of volatility that might shroud the equity markets for quite some time.

Also, that’s going to hit smaller stocks — which depend more on debt capital for growth — than larger ones.

Large-cap stocks, on the other hand, generally have been in the industry for a long time and have seen numerous ups and downs, and thus are better positioned to weather challenges.

Bigger is Better

So basically, in this environment, large caps have two key factors playing in their favor — they are stable, established firms that provide a cushion in these tricky, volatile times, and by their very nature, they are also much more likely to stand tall when the storm of interest rate increase finally hits.

Apart from this, we are generally more likely to find value in large caps. This is because such companies usually have lower growth forecasts, as it’s hard to make really huge gains off a large base. This characteristic keeps out the greedy money from such stocks, thus putting a lid on valuations.

But one should be careful to not get caught in a 'value trap.' Some stocks have depressed valuations for a reason beyond market sentiment. To avoid such stocks, we must focus on large caps that boast strong fundamentals and have great value characteristics relative to their peers.

5 Large Cap Values

With the help of our Zacks Stock Screener, we have shortlisted 5 large cap stocks (market cap over $10 billion) and carrying a Value Style Score of 'A.' Further, all these stocks sport a top Zacks Rank #1 (Strong Buy).

Our style score system helps identify stocks that have a solid upside potential. Our Value Style Score condenses all valuation metrics into one actionable score that helps investors steer clear of 'value traps' and identify stocks that are truly trading at a discount.

A top Value Style Score knocks out a lot of the screening process as it takes into account several factors including valuation metrics like P/E, PEG ratio (P/E relative to earnings growth) and P/CF (Price to Cash Flow) as well as performance relative to its peers.

These are the few blue chips that got through our screen and are currently trading at attractive valuations:

Energy Transfer Equity, L.P. (ETE - Snapshot Report)

Energy Transfer Equity provides diversified energy-related services in the Unites States. The company sells natural gas to electric utilities, independent power plants, local distribution companies, industrial end-users, and other marketing companies.

This stock is currently trading at a P/E of 15.15x, having declined over 21% over the past month. It also has a PEG ratio of 0.76, suggesting that its growth is excellent for the price that it trades for.

Huaneng Power International, Inc. (HNP - Snapshot Report)

Huaneng Power is an independent producer, generator and seller of power throughout China. The country is both the world’s largest producer and importer of coal.

The  stock is currently trading at a relatively undervalued P/E of 5.91x, having declined over 22% over the past month. It also has a PEG ratio of 0.45, signifying excellent growth relative to its price.

Best Buy Co., Inc. (BBY - Analyst Report)

Headquartered in Richfield, MN, Best Buy operates in a single business segment, selling personal computers and other home office products, consumer electronics, entertainment software, major appliances and related accessories principally through its retail stores.

This multinational specialty retailer is trading at a P/E of 12.69x currently and has declined almost 10% over the past month. It also has a PEG ratio of 1.19, suggesting that its growth is exceptional relative to its price.

Korea Electric Power Corp. (KEP - Analyst Report)

Korea Electric Power, also known as KEPCO, is an integrated electric utility engaged in the generation, transmission, distribution of electricity and development of electric power resources in South Korea.

This stock is currently trading at an immensely cheap P/E of 2.74x, having declined 5.9% over the past month. It also has a PEG ratio of just 0.11, indicating that the company’s growth rate is outstanding relative to the price that it trades for.

Carnival plc (CUK - Analyst Report)

This cruise company offers cruises under the Carnival Cruise Lines, Holland America Line, Princess Cruises, and Seabourn brands in North America; and AIDA Cruises, Costa Cruises, Cunard, P&O Cruises (U.K.), and P&O Cruises (Australia) brands in Europe, Australia, and Asia.

The stock is currently trading at a P/E of 21.05x, with a PEG ratio of 0.97, suggesting that its growth is excellent for the price that it trades for.

Go Big This Season

Whether you are looking to strengthen your portfolio or manoeuvre a period of volatility, these are the right picks for you. Volatility seems to be piling on the market at regular intervals, and the smartest play could be to buy these discounted large cap value stocks, and wait out the storm.