Rising concerns about the economy and rate cuts have led to a mixed earnings season, low consumer spending and a stock sell-off. While most of the indices have recovered since the past week, many stocks are trading at a discount and smart investors know that now is the time to make the bet. Some of the most well-known companies have reported impressive quarterly results, but it hasn’t helped the stock surge. I’ve identified such overlooked stocks worth buying this month.
They are trading at a discount but are a solid long-term bet. These overlooked stocks have the potential to report stellar fundamentals, see strong revenue growth and have the ability to expand their market share. With that in mind, let’s take a look at the three overlooked stocks to buy.
Palantir Technologies (PLTR)
One of my favorite overlooked tech stocks is Palantir Technologies (NYSE:PLTR). Many investors believe that PLTR is priced at a premium but I think it is aptly priced. The tech giant has reported a blowout quarter and its fundamentals are proof that it is one of the industry leaders today. Once criticized for working only with government clients, Palantir has built a heavily diversified portfolio with commercial clients.
It ensures steady income from government projects while expanding its commercial base. In the second quarter, Palantir reported a revenue of $678 million, up 27% year-over-year and the EPS came in at $0.06. It saw an 83% YOY jump in commercial customer count and closed 27 deals over $10 million in the quarter. It is generating impressive cash flow and has guided for free cash flow of $800 million to $1 billion for the year.
Palantir has been using AI for many years now and its Artificial Intelligence Platform (AIP) has brought massive growth for the business. Trading at $29, the stock didn’t move after the stellar earnings announcement.
It is up 77% year-to-date and 86% in the past 12 months. I believe Palantir will be one of the top AI stocks to own and its momentum will continue throughout 2024. The stock is a slow and steady winner which will see impressive revenue growth.
BYD Company (BYDDF)
One of the best electric vehicle (EV) stocks to own in the current market is BYD (OTCMKTS:BYDDF). The EV industry has been in a slump since last year and low consumer spending has led to a drop in demand. Amidst the market uncertainties, BYD Company continues to thrive. BYD Company holds an 18% market share and has a global presence.
It saw a 156% YOY jump in international sales to 26,995 vehicles in June and it managed to sell 1 million new energy vehicles in the second quarter. It saw a 31% YOY rise in sales and delivered 341,000 vehicles in July.
The company is expanding aggressively and has partnered with Uber (NYSE:UBER) to add 100,000 EVs to its platform in Europe and Latin America. BYD Company has also signed a $1 billion deal for a new EV factory in Turkey to produce 150,000 vehicles annually. Its efforts to expand beyond the domestic market are already paying off.
The EV market will take time to recover but if you are looking for an overlooked stock to buy before it soars, consider BYD. Trading at $27, the stock hasn’t seen much action in the year. However, looking at BYD Company’s history, market presence and wide product offering, one cannot go wrong with this stock.
Morgan Stanley (MS)
I have been pounding the table for Morgan Stanley (NYSE:MS) over the past few months. The company’s recovery has been impressive. An improvement in the investment management business has helped drive the fundamentals higher, however, it hasn’t reflected on the stock. MS stock has remained flat since the start of the year and is exchanging hands for $94.
Its business is growing at a rapid pace with its deal-making activities and an improvement in the wealth management sector. The company saw a 51% year-over-year jump in investment banking revenue and a 41% YOY jump in profit to $1.82 per share. Morgan Stanley beat expectations and has a dividend yield of 3.90%, making it an ideal choice for passive income investors.
Besides the new CEO taking charge this year, Morgan Stanley will benefit from the rising interest rates. While Morgan Stanley may not be as strong as the other financial giants, it is worth betting on. The stock looks cheap to me and is a good buy below $100.
After suffering from a slump over the past two years, the company has bounced back and is seeing business improvement. Buy MS stock before it soars beyond $100.
On the date of publication, Vandita Jadeja did not hold (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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
