While the market has rallied from the lows in early February, it is still trading well below the all-time highs printed in January. You combine the market pullback with earnings growth that is rising, and forward price-to-earnings ratios have fallen considerably. In fact, some of the forward numbers are as low as in 2016. While not cheap on a historical basis, they are much better values for the first time in a long time.

One area that looks particularly enticing is the mid-cap arena. Members of the Russell Midcap index have a market cap of $8 billion to $10 billion, with a median value of $4 billion to $5 billion. So they are large enough to have liquidity but small enough to be nimble. Best of all, they are currently the cheapest of all, trading at about 16.8 times forward earnings estimates.

We found five of the bigger members, which are among the largest holdings in the Russell Midcap index, that are rated Buy at Merrill Lynch. All make good sense for growth portfolios looking add mid-cap exposure.

Ciena

This company posted very strong earnings this week and took the sector higher. Ciena Corp. (NASDAQ: CIEN) is a vendor for high-capacity optical transport and Ethernet switching equipment to carriers, enterprises, cable operators and governments. It specializes in transitioning legacy communications networks to converged, next-generation architectures capable of efficiently delivering a broader mix of high bandwidth services.

The company’s Converged Packet Optical segment offers networking solutions optimized for the convergence of coherent optical transport, Optical Transport Network (OTN) switching and packet switching. Its products comprise the 6500 Packet-Optical Platform, 5430 Reconfigurable Switching System, CoreDirector Multiservice Optical Switches and OTN configuration for the 5410 Reconfigurable Switching System.

Top analysts feel that Verizon’s metro 100G buildout will be a focus for 2018, and the company could see catch-up spend from the now combined Centurylink. In addition, the new Waveserver products likely will continue to ramp as additional customers are added.

The Merrill Lynch price target for the shares is $28, and the Wall Street consensus target is $26.96. The shares closed trading on Tuesday at $25.71 apiece.

Nabors Industries

This company provides drilling and rig services, and some feel it could be a takeover target. Nabors Industries Ltd (NYSE: NBR) owns and operates the largest land-based drilling rig fleet in the world, and it is a leading provider of offshore platform workover and drilling rigs in the United States and select international markets. Revenues in 2016 were $2.23 billion.

Nabors markets approximately 400 rigs for land-based drilling operations in the United States, Canada and approximately 20 other countries worldwide, and 41 rigs for offshore drilling operations in the United States and internationally.

While the stock has rallied off the lows, Nabors is still down over 50% from highest levels posted a year ago. This concern has been exacerbated recently by a softer-than-expected third-quarter earnings report and focus on 2018 non–cash deferred revenues. While most don’t see a quick fix for the company, the worst surely looks to be over.

Merrill Lynch applauded the company’s debt deal completed earlier this year:

Nabors took advantage of attractive credit market conditions with an $800 million debt offering to address near-term maturities. The offering removes an overhang on the stock by addressing its maturity with refi rather than prior plans to use the revolver. We remain at a Buy rating and feel the company should be a key beneficiary in a $60 barrel oil environment.

Nabors investors are paid a 3.4% dividend, though that may be lowered going forward. Merrill Lynch has a $10 price target, while the consensus price objective is $9.10. Shares closed well below those levels Tuesday at $7.08.