Investors’ renewed optimism regarding the economic recovery, and the consequent stock market momentum, has led to sky-high valuations for several stocks, which in some cases is not justified considering those names’ growth prospects. As the central bank acknowledges that prices have risen more quickly and consistently than expected, investors might be worried. We believe that it is wise to invest in quality stocks such as Oracle Corporation and AstraZeneca Plc, which are undervalued at current prices. Read on.With significant improvement in the employment rate and the overall economy, Fed Chairman Jerome Powell has announced the Fed’s plans to begin bond tapering later this month and has reaffirmed that the central bank will not rush to raise interest rates. Major stock indices rose to new records on Wednesday, thanks to this announcement.

However, in the face of rising inflation, which the Fed deems “transitory,” it may be risky to invest in high-flying stocks, which have reached valuations that in some cases are not justified by their company’s growth prospects. Because any market decline could mean a substantial price drop for these stocks. However, this could also prove to be the right time to place your bets on high quality stocks trading at fair valuations. This year, value stocks have performed relatively well, as evidenced by the SPDR Portfolio S&P 500 Value ETF’s (SPYV) 19.7% returns year-to-date.

Despite performing well in recent months, shares of Oracle Corporation (ORCL) and AstraZeneca Plc (AZN) appear undervalued at their current price levels, given these companies’ growth attributes. These stocks are ideal investments now, according to us.

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