On Friday, the S&P 500 closed within 2% of its all-time high. Despite cracks in the real economy, such as supply chain concerns, inflation, and other risks, Wall Street continues to take an optimistic approach by focusing on the long-term potential of many leading companies. Even with the market's excellent year-to-date return, there are several quality businesses that have seen their stocks underperform the benchmark. We asked some of our contributors which value stocks were too cheap to ignore. They identified three stocks that were each down at least 20% from their highs. Here's what makes Stanley Black & Decker (NYSE: SWK), Taiwan Semiconductor (NYSE: TSM), and Royal Gold (NASDAQ: RGLD) all great buys now. Image source: Getty Images. Not just a DIY tools company Lee Samaha (Stanley Black & Decker): Investors have sold off the tools and hardware stock for a couple of reasons. First, there's the fear that the company will inordinately suffer from rising raw material prices and supply chain difficulties that have hit the industrial sector. In addition, there's the fear that the surge in DIY interest created by the pandemic will subside and make tough comparisons for the company. Those fears may well be justified. For example, the company got hit by $1 billion worth of extra costs due to tariffs, exchange rate movements, and rising raw material costs in 2018, 2019, and 2020. Meanwhile, home improvement retailer Lowes reported a 2.2% decline in U.S. comparable sales in its second quarter. Still, it's important not to get lost in the details of near-term trading. After all, Stanley has plenty of growth prospects. The professional customer is coming back strongly, and Stanley's acquisition of outdoor products company MTD will boost revenue in an exciting growth category. Meanwhile, the company's leadership in e-commerce left it well-positioned to benefit from the pandemic and 18% of its tool sales now come from e-commerce. Trading on just 15 times 2020 earnings, the sell-off in the stock is a good buying opportunity for investors willing to close their eyes and ears to any potential bad news in the coming quarter. Taiwan Semi is positioned to grow for decades to come Daniel Foelber (Taiwan Semiconductor): Large tech stocks like Amazon and Apple have helped propel the U.S. stock market to new heights in 2021. Despite being the largest semiconductor company in the world, Taiwan Semi has lagged behind its competitors as the company faces a slowdown in growth coupled with plans for higher spending. The stock is up just 5% for the year, underperforming the majority of its competitors. TSM data by YCharts The stock is also down around 20% from its all-time intraday high of over $142 a share set on Feb. 16, 2021. Yet despite the stock's underperformance, Taiwan Semi looks like a great value. The company is the industry-leading chip foundry, operating the most advanced manufacturing process in the world. Its entrenched position in smartphones and advanced computing, and its role in the growing demand for chips in just about every industry, provide the backdrop needed for decades of growth. Supply chain woes and Chinese political risks have been two key headwinds impacting Taiwan Semi in recent months. But one look at the company's performance shows the business continues to do well. Taiwan Semi reported its third-quarter 2021 results on Thursday. Highlights included record-high quarterly revenue of $14.88 billion, diluted earnings per share of $1.08 per U.S. ADR unit, a record high, and a healthy operating margin of 41.2%. The company's fourth-quarter guidance suggests revenue of $15.4 billion to $15.7 billion and an operating margin of roughly 40%. Based on its sales and earnings numbers, Taiwan Semi looks like a great value now. Concerns to be aware of are the company's plan to invest $100 billion in the next three years to grow its manufacturing capacity, as well as the aforementioned Chinese threats. The company is focused on maintaining its industry-leading position at all costs, which could impact the bottom line in the coming years. Despite the risks, investors looking for a mega-cap growth stock in today's market would be hard pressed to find a better value than Taiwan Semi. This gold stock is a hidden gem Scott Levine (Royal Gold): While many people like to show their love of gold by wearing glittering bracelets and necklaces, investing in the yellow metal is a more nuanced situation. The most advantageous time to start (or add to) a position is when the price of gold has fallen, since there's a high correlation between the movements in the price of gold and those of gold-related stocks. Such is the case with Royal Gold, which is currently trading about 23% lower than its 52-week high of $129.69 -- an unsurprising fall considering the price of gold has tumbled about 6% since this time last year. Operating differently from mining companies, Royal Gold is a royalty and streaming company. Instead of digging the yellow stuff out of the ground, Royal Gold provides upfront capital to mining companies to help them finance the development of their assets. In exchange, Royal Gold obtains the right to purchase a portion of the produced metal at a discounted price or to receive a percentage of the mine's mineral production. Although the price of gold has bounced higher and lower over the past three years, Royal Gold's business model reduces the risk that mining companies face when the prices of commodities drop. Over the past three years, for example, Royal Gold has reported steady rises not only in revenue but with earnings before interest, taxes, depreciation, and amortization (EBITDA) as well as operating cash flow. RGLD Revenue (Annual) data by YCharts. The company's future seems to be paved in yellow brick as well. Besides the seven core assets in its portfolio, Royal Gold has 16 projects in the development phase and more than 50 properties that are in the evaluation phase. It's only the fact that it's trading more than 20% below its 52-week high that makes it seem like a bargain; the stock is also trading at a discount in terms of its operating cash flow valuation. Currently, Royal Gold is changing hands at about 15.7 times operating cash flow, representing a notable discount to its five-year average cash flow multiple of 21.5. It seems that, from a few different angles, Royal Gold is an inexpensive way to add some luster to investors' portfolios. 10 stocks we like better than Stanley Black & DeckerWhen our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and Stanley Black & Decker wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of September 17, 2021 John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Daniel Foelber has the following options: long December 2021 $105 calls on Taiwan Semiconductor Manufacturing, long January 2022 $110 calls on Taiwan Semiconductor Manufacturing, short December 2021 $115 calls on Taiwan Semiconductor Manufacturing, and short January 2022 $115 calls on Taiwan Semiconductor Manufacturing. Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon, Apple, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Lowes and recommends the following options: long January 2022 $1,920 calls on Amazon, long March 2023 $120 calls on Apple, short January 2022 $1,940 calls on Amazon, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.Source