10 Stocks That Could Rise in Market Decline

BOSTON (TheStreet) -- Evidence is building that the overheated stock market is ready to take a breather, so investors may want to hunker down with high-quality, but undervalued, stocks. They may be hurt less in the event of a market tumble and have more upside in a subsequent rebound.

S&P Capital IQ's chief equity strategist, Sam Stovall, said Monday that among the indictors that a correction is nigh is that the S&P 500's roughly 29% gain of the past six months exceeds the 24% average in the severe corrections or mild bear markets since 1945, and it is approaching the 32%, 12-month average increase seen in such recoveries.

S&P strategist Mark Arbeter predicts that the S&P 500 "could surrender 3% to 5% in a mild pullback," which would mean a decline to its 50-day moving average of around 1,370, or even to its 65-day average near 1,350, "before resuming its upward trajectory." The S&P is at 1,385 now.

With that in mind, I screened the Morningstar database of its highest-rated stocks (five-star ratings) to find which among them are trading at the biggest discount to Morningstar's "fair value" estimate.