Since the start of the year, BP (LSE: BP) has risen by 27%. As a result, many investors may feel that BP is due for a price fall, owing to profit-taking among investors. And with the outlook for oil in the near term being highly uncertain due to a continued imbalance between demand and supply, a pull-back in BP’s share price can’t be ruled out.

However, for long-term investors, BP remains a very appealing buy. It may continue to be volatile and its financial performance may prove to be rather lumpy. However, BP offers a world-class asset base that’s highly diversified and capable of delivering improving profitability, at a relatively low valuation. For example, BP trades on a price-to-book (P/B) ratio of just 1.15 and while this represents a premium to net asset value, there’s scope for additional goodwill over the coming years.

That’s because BP is now moving on from the Deepwater Horizon oil spill and while investors may be concerned about the prospect of further sanctions against Russia, investor sentiment towards BP is much more buoyant now than it was a few years ago. Therefore, with sound finances, a low valuation and improving investor sentiment, now could be a great time to buy BP.

Pain priced-in?

Similarly, Santander (LSE: BNC) has endured a challenging period in recent years. As with BP, further difficulties could lie ahead since two of Santander’s key markets. Brazil and the UK, have relatively hazy financial outlooks. Therefore, despite being a global bank that’s well-diversified, Santander could still find its bottom line coming under pressure if the macroeconomic outlook deteriorates in Brazil or the UK, both of which seem to be on the cards.

Despite this, Santander offers a sound long-term outlook. Its balance sheet is robust thanks to a recent fundraising and its price-to-earnings (P/E) ratio of 9.3 indicates that it offers upward rerating potential. Furthermore, Santander’s valuation shows that it has a wide margin of safety, with the market apparently pricing-in more difficulties for the bank. Should they fail to be as severe as expected, Santander could deliver stunning capital gains, while its downside may be limited by its super-low valuation.

Income play

Meanwhile, shares in flooring specialist James Halstead (LSE: JHD) have fallen by 20% since the turn of the year. While disappointing, the company’s financial performance could gain a boost from weaker sterling since exports form an important part of its business. Certainly, this may be offset by higher costs thanks to the potential for higher inflation, but with Halstead having a good track record of growth, its long-term future is likely to be bright.

As well as growth potential, Halstead also offers a generous yield of 3.5%. Dividends are covered 2.1 times by profit and this indicates that even if profit growth stalls somewhat, there’s still scope for an increasing income return for the company’s investors. With interest rates set to fall, James Halstead could become an increasingly popular income play, which may act as a positive catalyst on its share price.

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Peter Stephens owns shares of BP. The Motley Fool UK has recommended BP. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.