Author: Nikki-Lee Birdsey
Estimated read time: 2 minutes
Publication date: 20th Dec 2019 11:35 GMT+1
The strong bull market in 2019, with a 24% gain in the S&P 500, makes finding undervalued stocks harder than usual. But economists are predicting a slowdown in the not so distant future, as major financial centers such as the United States and the United Kingdom experience political uncertainty.
What will be the economic impact of the United Kingdom exiting the European Union? How will the Dow react to a Trump administration in crisis with the increasing pressure of impeachment and an election?
What Is an Undervalued Stock?
An undervalued stock is a stock selling at a price significantly below what is its assumed value. These are stocks with a lower than average P/E ratio or a low P/E ratio to growth rate. Blockbuster investor Warren Buffett is famous for investing in undervalued stocks, but it’s important to note that there is no guarantee that an undervalued stock will appreciate in value.
3 Undervalued Stocks to Watch
Here are three undervalued stocks right now.
Cisco Systems (NASDAQ: CSCO) is a major tech conglomerate that makes and sells networking products and telecommunications equipment. Cisco’s current 18 P/E ratio is below that of the S&P 500's ratio of 23. With a current forward dividend yield of 3.1%, this stock has a three-year average dividend growth rate of 14.6%. Cisco is also exposed to technology growth areas like data center solutions and cloud networking. Cisco should also reap benefits from the future rollout of 5G.
Matador Resources Co (NYSE: MTDR) is a U.S. oil and natural gas company. It has an 8.1 P/E ratio that renders it undervalued, and is a takeover candidate by larger producers. Another good sign is that it is currently engaging in heavy insider buying, with falling year-to-date production costs.
Equitrans Midstream Corp (NYSE: ETRN) acquires and operates natural gas transmission, storage and water assets in the Appalachian Basin. Its trailing P/E ratio of 162 shows the company’s low valuation. This is mainly due to a delay in opening the Mountain Valley Pipeline and lower natural gas prices, but the expected earnings per share this year of $1.50 shows promise.
Disclaimer: The writer is an experienced financial consultant who writes for Finscreener.org. The observations he makes are his own and are not intended as investment or trading advice.
Copyright © 2016-2022 Finscreener.org. All Rights Reserved.
Disclaimer: Before deciding to trade you should carefully consider your investment objectives, level of experience and your risk appetite. Forex and Tradegate data is a real-time with a 30 second refresh. Prices may not be accurate and may differ from the actual market price. Prices on the website are indicative and solely for informational purposes, not for trading purposes or advice. Please be aware of the risks associated with trading the on financial markets, it is one of the riskiest investment forms. Past performance does not guarantee future profits. We take no responsibility for any losses that may arise as a result of the data contained on this website. The content and the website are provided "as is", without any warranties. In no event will Finscreener.org, its employees, owners, directors, affiliates, partners, data provider, third party or anyone else liable to anyone else for any decision made regarding information on this website.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.
This could take some time, please wait.