- These seven undervalued stocks to buy are now at attractive prices after the latest stock market selloff.
- ArcelorMittal (MT): The steel company returned to profitability in 2021 with massive net income growth.
- American International Group (AIG): An insurance company with a stellar 2021 financial performance.
- MetLife (MET): Another insurance company with stable revenue and a consistent net income trend.
- Stellantis (STLA): An automotive group with solid fundamentals and an attractive dividend yield.
- Dell Technologies (DELL): A technology firm that generates a lot of positive free cash flow at a price that is worthy of attention.
- DISH Network (DISH): The crash after a weak Q1 report and subscriber loss creates a contrarian play.
- Paramount Global (PARA): A global entertainment company with solid fundamentals at a discount.
Are we in a bear stock market? Can stocks move lower? How likely is a recession? I’m sure all of these questions are commonplace among investors today, including this next one: What are some popular stocks to consider investing in now after the latest stock market sell-off? “Undervalued” is the magic term here. The following seven undervalued stocks to buy after the selloff have very attractive stock prices, solid fundamentals, are well-established businesses and have high odds of rebounding later this year.
Investing in undervalued stocks makes sense after a steep selloff of the stock market. It is the principle of safety margin, investing in stocks that trade at a considerable margin of safety or discount compared to their intrinsic value. The idea is that at some point in time, there should be a convergence in both the stock price and the intrinsic price. These seven undervalued stocks to buy are from various sectors, from the basic materials sector to the communication services sector.
Here are my top seven undervalued stocks to buy now:
|AIG||American International Group, Inc.||$58.50|
|DELL||Dell Technologies Inc.||$50.17|
|DISH||DISH Network Corporation||$22.36|
Undervalued Stocks to Buy: ArcelorMittal (MT)
ArcelorMittal (NYSE:MT), together with its subsidiaries, operates integrated steel and mining companies in Europe, North and South America, Asia, and Africa. It was incorporated in 1976 and is headquartered in Luxembourg City, Luxembourg.
Shares of ArcelorMittal trade at a price-to-earnings (P/E) ratio trailing twelve months (TTM) of 2.04 and have a one-year target estimate of $51.43.
In terms of valuation, MT stock is very cheap. The forward P/E ratio is 2.67. The current price-to-sales (P/S) TTM ratio is 0.37 and the price-to-book (P/B) value is only 0.48. Additionally, MT stock is up about 2% year-to-date (YTD).
American International Group (AIG)
American International Group (NYSE:AIG) offers insurance products for commercial, institutional, and individual customers in North America and internationally. The company was founded in 1919 and is headquartered in New York.
If you are looking for a stock that is undervalued and has proven to be resilient under the stock market selling pressure of 2022, then AIG stock should be on the top of your list. Shares of American International Group have gains of 2.8% in 2022 and have a three-month performance of approximately negative 7.4%.
In 2021, American International Group reported a strong financial performance with a sales growth of 19% to $52 billion and a net income growth to $9.4 billion compared to a $6 billion net loss in 2020. The stock trades at a P/E ratio (TTM) of 5.1 and has a forward dividend yield of 2.22%.
AIG shares are cheap given the following figures. The current P/S TTM ratio is 0.89 and the P/B ratio is 0.79.
Undervalued Stocks to Buy: MetLife (MET)
MetLife (NYSE:MET) is the second insurance company on this list of undervalued stocks to buy. The firm has global operations, was founded in 1863, and is headquartered in New York.
An analysis of its income statement over the past five years shows a stable sales trend and a consistent net income trend. The latter showed plenty of momentum in 2021 as net income growth was 21.21%.
Large and mature companies like MetLife are rather safe bets for investors that hate risk and want to avoid large price fluctuations. Shares of MetLife are up 6.9% in 2022 and have losses of 2.3% over the past three months. The P/E ratio TTM is 8.56. Additionally, the forward dividend yield is 3.1%.
The current P/S TTM ratio is 0.81 and the P/B ratio is 0.95. The one-year target estimate is $77.77, an upside potential of 16%.
Stellantis (NYSE:STLA) designs, engineers, manufactures and sells automobiles and light commercial vehicles, engines, transmission systems, metallurgical products, and production systems worldwide. Some of the brands in the Stellantis portfolio include Abarth, Alfa Romeo, Chrysler, Citroën, DS, Dodge, Fiat, Fiat Professional, Jeep, Maserati, Ram, Opel, Lancia, Vauxhall, and Peugeot.
The STLA stock has losses of 21% in 2022, making it an undervalued stock that deserves a lot of attention now.
2020 was a very bad year for the automotive industry. Stellantis has rebounded in 2021, reporting net revenues up 14% to 152 billion euro and net income that nearly tripled year-over-year to 13.4 billion euro. The stock trades at a P/E ratio TTM of 3.06 and has a very attractive forward dividend yield of 7.66%.
The P/B value of 0.75 and P/S TTM ratio of 0.28 signal that shares of Stellantis are cheap now.
Undervalued Stocks to Buy: Dell Technologies (DELL)
Dell Technologies (NYSE:DELL) engages in the provision of information technology hardware, software, and service solutions through its subsidiaries. It operates through the following segments: infrastructure solutions group, client solutions group, and VMware.
Technology stocks have been under selling pressure in 2022 and DELL stock is no exception. Shares of Dell Technologies have losses of 12.7% year-to-date. The forward dividend yield of 3.23% is a plus for this cheap technology stock trading at a P/E ratio TTM of 6.98.
One of the many factors to like about Dell Technologies is its free cash flow trend. It is positive and consistent for the fiscal years 2018 to 2022. The one-year target estimate of $61.09 signals an upside potential of 22%. The current P/S TTM ratio of 0.34 is too low and the fiscal 2023 forward P/E ratio is only 6.11.
DISH Network (DISH)
DISH Network (NASDAQ:DISH) provides paid TV services in the United States. It operates in two segments: Pay-TV and wireless. DISH Network Corporation was founded in 1980 and is headquartered in Colorado.
Shares of DISH Network have losses of approximately 32% in 2022 and 29% in the past month. The reason is weak first-quarter earnings. Dish reported that in the first quarter, pay-TV subscribers fell by 462,000 and wireless subscribers fell by 343,000.
The firm is investing in its 5G wireless network and it is a contrarian and deep value play. The fundamentals are not bad and the free cash flow trend is also robust.
Undervalued Stocks to Buy: Paramount Global (PARA)
Paramount Global (NASDAQ:PARA) is a worldwide media and enter It develops, produces, and distributes films. It was incorporated in 1986 and is headquartered in New York.
Shares of Paramount Global have defied the latest selloff as they have gains of 11% in 2022, but are down approximately 21% over the past year. The business is solid with a rather stable sales trend in the past four years.
In 2021, the firm reported sales growth of 13%. Net income growth increased 90.07% to $4.38 billion. The profitability is very solid and free cash flow is volatile, but it gets a passing grade. The valuation is very attractive now. The P/E ratio TTM is only 5.45 the forward dividend yield is 2.96%.
There is also a stock at discount now as the P/B value of 0.0 and P/S TTM ratio of 0.73 support the fact that it is a cheap stock.
On the date of publication, Stavros Georgiadis, CFA did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.