Everyone loves discounts and that’s essentially what value stocks to buy represent. The difference, though, between a value play and a “cheap” security comes down to the credibility (or lack thereof) of the underlying narrative.
A cheap stock is akin to browsing for apparel at the discount rack. You find the attire that you’re looking for but it’s either sized for kids or for NBA centers. On the other hand, a value stock is finding appropriately sized clothing but for the “wrong” season.
However, you decide to pick it up because you know that the season (whatever it is) will eventually come up. That’s the framework behind these value stocks to buy.
General Motors (GM)
One of the biggest automotive manufacturers in the world, General Motors (NYSE:GM) needs no introduction. However, the narrative for GM has been taking a hit in recent years due to the rise of electric vehicles. Still, legacy automakers may be getting a reprieve. EV sales are falling while demand for hybrids is soaring. That presents an opportunity for General Motors, in part because pure-play EV manufacturers can’t respond.
Just as well, GM has the option of pivoting back to EVs once the sector heats up again. So, it makes for a solid case for value stocks to buy. Between the second quarter of 2023 to Q1 2024, the automaker posted a positive earnings surprise of nearly 14%. In the trailing 12 months (TTM), GM posted net income of $10.62 billion on revenue of $174.87 billion.
For fiscal 2024, experts anticipate earnings per share to hit $9.60. If so, that would represent a 25% increase in the bottom line. In addition, fiscal 2025 EPS could improve to $9.70. During this time, experts believe sales will also expand modestly. Combined with a very modest trailing-year earnings multiple of 5.39X, GM makes a good case for value stocks to buy.
Intel (INTC)
Another enterprise that needs no introduction, Intel (NASDAQ:INTC) is a technology powerhouse. However, the company has been overshadowed by its competitors, especially with semiconductor firms banking on the generative artificial intelligence wave. Still, that doesn’t mean that Intel is irrelevant. It has its work cut out for it but it still commands acumen in advanced fields like system on chips (SoCs).
To be fair, analysts aren’t giving INTC stock much of a sense, rating shares a consensus hold. Nevertheless, the average price target stands at $37.87, implying over 23% upside potential. Intel has strong support among its core believers in part because of its earnings performance. Indeed, the average positive surprise came out to 166.73% in the past four quarters since Q1 2024.
In the TTM period, Intel posted net income $4.07 billion on revenue of $55.24 billion. For fiscal 2024, experts believe that EPS will rise to $1.09, implying 3.8% growth. That doesn’t sound like much. However, in fiscal 2025, EPS could soar to $1.95. Also, sales could expand by 12.4% to hit $62.69 billion. If you can take some risk, INTC could be an intriguing idea for value stocks to buy.
Pfizer (PFE)
To be sure, pharmaceutical giant Pfizer (NYSE:PFE) is a tricky name. Let’s face it, there are few sectors that command sustained relevance like healthcare. Further, Pfizer is a massive business and it received a tremendous boost during the Covid-19 years thanks to its vaccine. With fears of the SARS-CoV-2 virus fading, though, PFE stock has indeed suffered a relevancy problem.
Over the past 52 weeks, shares have slipped 22%. They also lost almost 27% of their value in the past five years. That means Pfizer suffered an implosion after performing so well during the early Covid years. Still, analysts rate PFE a consensus moderate buy with a high-side price target of $45. That may be because of its strong earnings performance. In the past four quarters since Q1, Pfizer’s earnings surprise clocked in at 67.68%.
In the TTM period, the company did suffer a loss of $288 million on revenue of $54.89 billion. That’s not great. However, for fiscal 2024, experts see EPS expanding by nearly 28% to hit $2.35. By fiscal 2025, the metric could reach $2.73 per share. During this time, revenue may rise by an average of 3.5%. Combined with a forward yield of 5.82%, PFE is one of the value stocks to buy.
On the date of publication, Josh Enomoto 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.
