NEW YORK (MONEY) - Investor sentiment just keeps getting worse. There are legitimate reasons to be worried these days. But stock prices - particularly for shares of big, high-quality growth companies - look overly depressed.

As a result, well-diversified investors with long-term time horizons have a great opportunity to go bargain hunting. You may not know whether the stock market's next move will be up or down. But you do know that if you buy top-quality companies when they are statistically cheap, you'll likely boost your long-term returns.

I'm not convinced that the stock market is headed for a big decline.

Investors worry that job creation is sluggish, a sign that the economy may be slowing. But they also worry that unemployment has fallen to a five-year low of 4.6 percent, which will fan the flames of inflation.

They worry that the Federal Reserve will have to raise interest rates to fight inflation, as Fed chairman Ben Bernanke implied Monday. But they also worry that the Fed won't raise interest rates and that inflation will get worse.

And, of course, everyone worries that the price of oil will spike higher.

But it's actually hard to have all those problems at the same time. The stagflation of the 1970s was an unusual exception. And the economy today is nowhere near as troubled it was then.

In fact, if you just look at the numbers, the economic data continue to be somewhat encouraging. Growth is projected to be average or better over the next couple of years.

Inflation isn't that bad -- it's up 3.5 percent over the past year. Moreover, core inflation -- excluding volatile energy and food prices -- is up only 2.3 percent. And interest rates aren't really that high.

High-quality growth stocks, however, are trading as though the worst-case scenario is almost inevitable. You never want to be overly optimistic, but when sentiment is as negative as it is now, solid growth companies are often bargains.

In fact, lots of stocks on the Sivy 70 list look reasonably priced. Some groups are cheap for obvious reasons: Banks and other financial stocks reflect fears about rising interest rates. Drug stocks reflect concerns that new products won't be rolled out fast enough to replace blockbuster drugs that are going off patent. And defense stocks reflect the belief that much of the runup in military spending is behind us.

When entire sectors are depressed, it isn't hard to decide what to buy. If you're interested in one of these groups, pick one of the industry leaders.

The more interesting cases are individual companies with shares that look undervalued relative to their growth prospects.

Among the stocks on the Sivy 70 list, three stand out based on valuation, projected growth and analyst ratings. In particular, they have double-digit growth rates and price/earnings ratios below 14, based on projected 2007 earnings.

Burlington Northern Santa Fe (Research) is one of the biggest railroads in North America. High oil prices benefit railroads, which are up to nine times more fuel-efficient than trucks. In addition, Burlington Northern is a major transporter of low-sulfur coal, which is used to generate electricity.

The railroad has profited from rising demand in all of its major business segments -- and first-quarter earnings were up 31 percent. Earnings are projected to grow at a 10 percent annual rate over the next five years, and the shares yield 1 percent. Nonetheless, at $75.64 the stock trades at only 13.4 times projected earnings for 2007.

Fortune Brands (Research) is a consumer conglomerate, consisting of top brands. Among them: spirits, such as Jim Beam bourbon, Courvoisier cognac and Sauza tequila; hardware, such as Moen faucets, Master Lock padlocks and Therma-Tru doors; and golf items, such as Titleist golf balls.

As I discussed in a profile last month, Fortune's net income was up 14 percent in the first quarter, and the company's smart, targeted acquisitions should help maintain long-term earnings growth, projected at 12 percent. The stock also pays a 1.9 percent yield. At $73.03, the shares trade at 12.6 times 2007 earnings.

Target (Research), the No. 2 U.S. retailer after Wal-Mart, has been posting gains in same-store sales that beat analysts expectations. Last week, I outlined prospects for Wal-Mart to improve its performance.

But Target has already solved those problems. In particular, the chain has done an excellent job of fine-tuning its product mix to attract both discount buyers and shoppers willing to buy more profitable merchandise. For the most recent quarter, earnings were up 12 percent, and full-year results are expected to rise more than 14 percent and continue at that rate. At $48.45, the shares trade at 13.6 times earnings for the next fiscal year.

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