Investors tend to group stocks into two broad categories: value stocks and growth stocks. Both offer their own unique set of advantages, but in this market, it might be the right time to start focusing on buying undervalued companies with solid fundamentals. With growth stocks hitting new all-time highs seemingly every day, the possibility for a correction and sky-high valuations is turning some investors towards value stocks.
The good news is that there are several stocks that appear undervalued and offer attractive entry points at this time.Since value investors look for companies that are trading at inexpensive valuations, finding stocks that are flying under the radar or haven’t rallied as much as the rest of the market from their March lows is a good place to start. In this article, we will focus on 3 potentially undervalued companies that should be able to withstand any short-term financial stress to provide investors with steady returns for years to come.
Bristol Meyers Squibb (NYSE: BMY)
When Bristol-Meyers Squibb completed its $74 billion-dollar acquisition of Biotech company Celgene in 2019, few investors could have envisioned the financial uncertainty ahead due to the global pandemic. Now that Covid-19 is affecting the economy and financial markets, many Bristol-Meyers Squibb shareholders have dumped their shares due to the massive debt load that it took on with the acquisition. That doesn’t mean that you should avoid this top-rated and pharmaceutical company by any means.
With this stock, you are buying an established company with nice growth potential as it continues to create new medicines that can help the aging U.S. population stay healthy. Bristol-Meyers Squibb produces several blockbuster pharmaceutical products with increasing sales such as blood cancer drugs Pomalyst and Revlimid. It also has lots of new drugs in late-stage programs and has increased its dividend payments by over 20% over the past 5 years. You have to like Bristol Meyer’s potential earnings growth from synergies as a result of the Celgene acquisition. This is the perfect example of a company that is being overlooked in the market at this time and is undervalued relative to its peers.
United Rentals Inc (NYSE: URI)
Buying shares of United Rentals, the world’s largest construction, industrial, and utility equipment rental chain has the possibility of paying off nicely in the long-term, especially if the economy recovers faster than anticipated. The company has built up a renowned brand in the industry and has been steadily expanding to new markets, which bodes well for its future. You also have chatter about a massive $1.5 trillion infrastructure spending plan that, if passed, would benefit United Rentals greatly.
This is a company that consistently beats its earnings estimates, has 95% institutional ownership, and should be able to handle any extended downturns in construction activity. Although there is risk in the short-term should construction activity continue to falter, the fact that this stock bounced so well off of March lows even before an infrastructure bill was on the cards is an encouraging sign. United Rentals has a big competitive advantage along with a diversified revenue model that has been rewarding investors for years. With a reasonable P/E ratio of 9.83 and a history of delivering strong earnings results, adding shares of United Rentals makes a lot of sense at this time. Keep an eye on this stock ahead of its Q2 earnings report on July 29th.
The Allstate Corp (NYSE: ALL)
Another great dividend-paying value stock that has been beaten up this year is The Allstate Corp. Although this company is laying off thousands of its staff, that shouldn’t scare you away from adding shares of the insurance giant to your portfolio. The financial sector as a whole has been hurting, but buying into the second-largest property and casualty insurance company in the United States is a good call.
The company has been consistently increasing its dividend payouts over the years and currently offers a 2.33% dividend yield. In a sector where lots of companies could be cutting dividends soon, The Allstate Corp offers reliable dividend growth thanks to its strong balance sheet and steady revenue. When Allstate reported Q1 earnings in May, its Adjusted Net Income rose an impressive 47% to $1.1 billion. Keep in mind that Allstate’s personal auto business has been benefitting from stay-at-home orders that have reduced traffic accidents and improved margins as well. Value investors are in good hands with this stock.
Most investors are equating value stocks as a way to take advantage of an economic recovery, but the truth is that no one knows how long the recovery will take since it is related to a public health issue. However, these three stocks are not at risk of becoming value traps thanks to the fact that they offer strong earnings, good balance sheets, and consistent demand for their products or services.
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8 Artificial Intelligence Stocks That Will Make You Feel Like a Smart Investor
In 2018, it was cannabis. In 2019, it was 5G. And yet before either of those trends, artificial intelligence (or AI) was growing relentlessly and undeniably.
Artificial intelligence stems from the simple fact that computers are getting smarter. And they are being designed to process information faster. The words “machine learning” are being used to summarize the creation of algorithms, freed from human programmers, which train themselves on massive data sets. Earlier this year, two separate artificial intelligence “machines” demonstrated the ability to “read” Wikipedia entries and answer questions better than humans did.
But AI is more than a parlor trick. Chances are at some point today, you’ve experienced a benefit of artificial intelligence. You may have gotten to this page because of an internet search. You may have asked Alexa or your Google Assistant to perform a command. You may have voice-activated your Roomba vacuum. You may have used an AI-powered GPS system to get to wherever you’re reading this.
In the future, you may be hailing an autonomous car. A virtual assistant will be able to place calls for you to make appointments. But instead of sounding like a robot, the assistant will sound human, with an understanding of context and nuance.
And those are just two applications. There will be more because the possibilities of artificial intelligence are expansive. But they can also be somewhat chilling. Many of the functions that are performed by humans today may be made obsolete by AI. But that’s a subject for another day.
Right now, you want to know how you can profit from this emerging trend.
You’ve come to the right place. In this special presentation, we will take a look at 8 stocks that can help you profit from the artificial intelligence trend.
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