Value investing involves picking stocks that appear to be trading lower than their intrinsic or book value. This approach involves looking for undervalued stocks with strong fundamentals and growth potential. By investing in these stocks, investors can achieve significant returns once the market recognizes their true value.
One way to identify value stocks is by comparing a company’s price-to-earnings (P/E) ratio with industry averages or its historical P/E ratios. This ratio compares a company’s stock price to its earnings per share. It must be noted that a lower P/E ratio may indicate that the stock is undervalued. Along with this, we have zeroed in on stocks that have received Strong Buy ratings from Wall Street analysts.
Here are this week’s stocks:
Regeneron Pharmaceuticals (REGN) – This biotechnology company develops innovative medicines for several diseases, such as eye conditions, cancer, and autoimmune disorders. Its average price target of $958.60 implies a 35.6% upside potential from the current levels. The company’s P/E of 18.3x is trading at a 36.5% discount to the Healthcare sector’s median of 28.81.
First Solar (FSLR) – This solar technology company that manufactures advanced thin-film photovoltaic (PV) modules for sustainable energy solutions. It currently has a P/E ratio of 13.4x, which is down 56.2% from the Technology sector’s median of 30.6. It has an average price target of $255.27, indicating a 62.76% upside.
Monolithic Power Systems (MPWR) – This semiconductor company provides high-performance, energy-efficient power solutions for various industries. The stock is trading at 18.1 times earnings, which reflects a discount of 62% from the Technology sector’s median of 30.6. Also, the average MPWR stock price target is $825.64, which implies an upside of 22.94% from current levels.