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These Stocks Still Have Room to Run

They've had the wind at their backs over the short term, and their long-term prospects look bright, too.

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The market has staged a bit of a comeback in recent weeks. For the year-to-date period, many stock sectors are in the red, but over the past month, things have looked considerably rosier. After falling around 10% over the first six weeks of the year, the S&P 500 has gained 7.0% over the past four weeks through March 30.

The two top-performing sectors over the past month are energy (up 10.2%) and basic materials (up 10.3%). In aggregate, we don't see too many bargains in these two sectors today; basic materials stocks look somewhat overvalued, with the average company under our coverage trading at a 12% premium to our fair value estimate, says senior equity analyst Jeffrey Stafford. And while there are some values to be found in energy, equity analyst David Meats cautions that with much uncertainty surrounding crude oil, near-term prices could remain ugly or deteriorate further.

Karen Wallace does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.