The Top 10 Undervalued Stocks to Watch Right Now
Stocks may have reached new highs recently, yet patient investors can still find value. Here are five stocks that might fill that need.
Morningstar finds stocks trading for less than their intrinsic values as we enter the second quarter of 2023. Ally Financial, for instance, continues to expand their market share in auto loans despite inflation eroding consumer spending power.
1. Lowe’s Companies
Lowe’s Companies Inc is an excellent investment choice for value investors, boasting a Zacks Rank of 3 and Value Score of B to indicate outperformance versus the market.
Home improvement sales grew steadily both before and post-Covid-19, while professional contractor revenues and e-commerce sales continued to expand at an astonishing rate – making this stock one of the most undervalued ones to invest in today.
2. Zoom Video Communications
Zoom Video Communications was an instant hit during the coronavirus pandemic as people used it to stay connected, yet revenue growth is beginning to slow.
AAII’s stock evaluation tool uses various factors to ascertain a stock’s worth, such as earnings estimate revision trends and changes in earnings estimates. Click here for more details of this useful tool.
3. Danaher
Minnesota Mining and Manufacturing Company was originally established in 1904 and boasts an excellent track record. Today, its stock trades below its fair value presenting long-term investors with an investment opportunity.
Use of key metrics, including PE ratios, earnings per share and debt can help identify undervalued stocks; however, extensive research is key in order to select stocks which will have long-term viability.
4. Autodesk
Autodesk, as a software company with a track record of strong earnings growth, serves as an indicator that it will expand further in the near future.
ADSK achieved a perfect 10 on our Smart Score scale, meaning it aced all eight predetermined factors that indicate share outperformance and is worthy of consideration for your portfolio.
5. Alphabet
Undervalued stocks may become even more attractive to investors during periods of market instability. Yet these undervalued shares often possess sound fundamentals and make for solid buys by themselves.
GOOGL’s Android mobile operating system and Google Search have helped the company drive revenue growth; however, year-over-year comparisons may become harder as the coronavirus pandemic winds down and web browser manufacturers discontinue customer tracking cookies.
6. Target
Value investors seek stocks that appear underpriced compared to their long-term potential. Target has recently suffered due to backlash surrounding its LGBTQ Pride merchandise; however, this could make for an excellent long-term buy.
Berkshire Hathaway, which owns insurance businesses, railroads and an energy conglomerate among numerous other enterprises. Berkshire recently went on a buying spree that should help accelerate long-term growth over time.
7. UPS
UPS is an impressive stock that is currently undervalued at current levels. Both its sales and net profits have experienced steady increases while maintaining an impeccable balance sheet.
Value investing is ideal for long-term investors willing to endure temporary negative market conditions, and understanding its core principles can help cushion the volatility while reaping long-term rewards.
8. Ally Financial
Ally Financial remains one of Wall Street’s most undervalued stocks despite disappointing investors in its most recent earnings report. Ally has established an infrastructure capable of weathering any decrease in used car sales while simultaneously expanding market share through auto loans.
Inflation could create short-term difficulties for a company, yet its long-term tailwinds should give it ample room to expand.
9. Zoom Video Communications
Zoom Video Communications stock is trading below its intrinsic value, even as revenue jumped during the coronavirus lockdown as businesses directed workers to work from home; however, that growth could diminish once office workers resume working normal hours again.
InvestorsObserver’s valuation analysis gives ZM a low valuation score at its current price, taking into account earnings estimates and growth rates to establish fair value.
10. Danaher
One way of finding undervalued stocks is analyzing a company’s price-earnings ratio or market capitalization – the current price per share multiplied by how many are owned by stockholders – is one approach.
LyondellBasell is a global specialty chemicals company and has achieved impressive growth over the past five years in sales and net profit.
