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.
Discover the Best Stocks and Maximize Your Portfolio:
- See what stocks are receiving strong buy ratings from top-rated analysts.
- Filter, analyze, and streamline your search for investment opportunities with TipRanks’ Stock Screener.
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 or Moderate Buy ratings from Wall Street analysts.
Here are this week’s stocks:
Merck (MRK) – This global pharmaceutical company develops medicines, vaccines, and healthcare solutions. Its average price target of $114.12 implies a 33.32% upside potential from the current levels. The company’s P/E of 12.3x is trading at a 57% discount to the Healthcare sector’s median of 28.65. The analyst consensus on the stock is Moderate Buy.
AT&T (T) – This telecommunications giant provides wireless, broadband, and entertainment services. It currently has a P/E ratio of 17.3x, which is down 14.4% from the Communication Services sector’s median of 20.21. It earned an analyst consensus of Strong Buy and an average price target of $27.54, indicating a 4.95% upside.
General Motors (GM) – This automotive company designs and manufactures vehicles under brands like Chevrolet, GMC, Cadillac, and Buick. The stock is trading at 7.6 times earnings, which reflects a discount of 62% from the Consumer Cyclical sector’s median of 19.99. The analyst consensus on the stock is Moderate Buy. Also, the average GM stock price target is $58.80, which implies an upside of 23.01% from current levels.
