With the equities sector generally flying higher, the concept of undervalued long-term stocks might seem a foreign one. Nevertheless, if you’re willing to step away from the spotlight, you can still find compelling deals.
Even better, certain ideas aren’t just deflated in interim. Rather, the market simply appears to be ignoring the ideas mentioned below. For patient speculators, that’s exactly what you want. If everybody decides to jump on the same opportunity, the ultimate upside potential may be limited.
On that note, below are intriguing ideas to consider for undervalued long-term stocks to buy.
Discover Financial Services (DFS)
Discover Financial Services (NYSE:DFS) through its subsidiaries provides digital banking products and services. It’s arguably best known for its payment services in the domestic market. The company provides Discover-branded credit cards to individuals, along with other solutions such as student, personal and home loans, in addition to other consumer lending products.
Fundamentally, DFS presents a tricky narrative for undervalued long-term stocks to buy. Given the economic challenges we’re in, high debt loads present the risk of rising delinquencies. On the other hand, the labor market (the April jobs report aside) has been relatively robust. As long as that’s generally true, people may continue to turn to their credit cards to make ends meet. Cynically, that’s a positive for DFS.
Notably, shares also trade at 1.92X trailing-year revenue, below 65.38% of competitors in the credit services industry. Not only that, covering experts project fiscal 2024 revenue to reach $16.85 billion, up 6.2% from last year’s haul of $15.86 billion.
In other words, DFS should be even more undervalued when stacked against forward sales.
General Motors (GM)
As one of the top automotive giants in the world, General Motors (NYSE:GM) needs no introduction. However, it finds itself in a difficult situation regarding the topic of undervalued long-term stocks to buy. On paper, GM is super cheap. It trades for only 4.8X forward earnings, below 94.52% of its peers. It also trades hands at 0.33X trailing-year revenue, below the sector median 0.86X.
Here’s the thing. GM has been making a strong pivot to electrification. That’s understandable given how electric vehicles were seemingly about to take over the world. However, a sector fallout has left the auto industry unsure of how to respond. Many companies are scaling back their EV ambitions.
Still, because GM has a viable portfolio of combustion-powered vehicles, it enjoys flexibility. Once EVs start gaining positive momentum, the company could resume its directive. In the meantime, GM can focus on what consumers really want, which are hybrid vehicles.
For fiscal 2024, analysts anticipate modest growth of 2.5% to $176.19 billion. Still, the high-side target hits $180.77 billion, which might not be unrealistic given the aforementioned push for hybrids.
TD Synnex (SNX)
While several innovators have moved higher due to the technology boom, not all enterprises have benefited to the same degree. That’s the case for TD Synnex (NYSE:SNX). Per its corporate profile, TD Synnex operates as a distributor and solutions aggregator for the information technology (IT) ecosystem. It provides myriad hardware solutions, including personal computing devices and peripherals, mobile phones and related accessories and printers.
In addition, TD Synnex provides endpoint technology software. It’s also a heavy hitter in datacenter technologies, including hybrid cloud, security, storage, networking, servers and converged and hyper-converged infrastructure. Despite the importance of the enterprise, SNX isn’t getting much love. For example, shares only trade at 0.19X trailing-year revenue, below 94.34% of the competition.
To be fair, there’s not much growth anticipated for the current fiscal year. However, in 2025, sales could rise to $60.73 billion, up almost 5% from projected 2024 revenue. Also, the blue-sky target calls for $61.62 billion. With the company generally producing strong quarterly earnings results, SNX appears to be one of the undervalued long-term 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.
