Stock market selloff leads to numerous US stocks being undervalued, offering investors discounts.
From Morningstar: 2024-08-13 10:02:00
The recent stock market selloff has led to several stocks dropping into undervalued territory, offering investors discounts. 46 stocks saw their Morningstar Ratings improve from 3 to 4 stars. Out of the 881 US-listed stocks, 40% are undervalued, with 46 newly undervalued stocks. Tech and consumer cyclicals were hit hardest in the selloff, with the Morningstar US Technology Index dropping 8.99% and the Consumer Cyclical Index falling 8.21%.
Amazon, Chevron, Adobe, Toyota, and Siemens are among the 10 newly undervalued stocks with the largest market capitalization. British American Tobacco, Diageo, STMicroelectronics, Fresenius Medical Care, and Wayfair are among the 11 stocks which moved from 4 to 5 stars, meaning they are significantly undervalued. Various stocks are now trading at discounts to their fair value estimates after the selloff.
Amazon, an internet retail company, is trading at a 15% discount to its fair value estimate of $195 per share. Chevron, an oil and gas firm, trades at an 18% discount to its $176 estimate. Adobe, a software infrastructure firm, is priced 16% below its $635 fair value. Toyota and Siemens are also trading at discounts to their fair value estimates, with 22% and 12% discounts respectively.
British American Tobacco, a large-value stock, is trading at a 28% discount to its $50 fair value estimate. Diageo, an alcoholic beverages company, is trading at a 22% discount to its $157 estimate. STMicroelectronics and Fresenius Medical Care are both trading at significant discounts to their fair value estimates. Wayfair, a small-value stock, is trading at a 55% discount to its $91 fair value estimate.
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