With stocks down 15% year-to-date, now could be a good time to invest.
you may want to consider Morningstar List among the “10 best companies to invest in right now.” The investment research firm has a list of the 129 best stocks to invest in overall.
Susan Dziubinski, investment specialist at Morningstar, writes: “These stocks have “significant competitive advantages and we consider those advantages to be stable or growing.”
“We believe the best companies have predictable cash flows and are run by management teams with a history of making smart capital allocation decisions.”
Morningstar selected the 10 most undervalued stocks, according to its fair value estimate, from the 129 best stocks. Here are the 10 stocks, in order of undervalued as of November 30, with the most undervalued first.
- Walt Disney (dis) – Get a free report
- Comcast (CMCSA) – Get a free report
- Taiwan Semiconductor (TSM) – Get a free report
- Wiring software (GWRE) – Get a free report
- vehicle (EFX) – Get a free report
- TransUnion (STAY) – Get a free report
- Anheuser-Busch InBev (DOLLY) – Get a free report
- delicious Chinese (YUMC) – Get a free report
- Tyler Technology (TYL) – Get a free report
- mascot (GHOST) – Get a free report
Disney: Morningstar analyst Neil Macker attributes the company a wide moat (long-term competitive advantage) and sets a fair value for the stock at $170. It was recently trading at $99, showing a 71% upside potential.
Commenting on the appointment of Bob Iger as CEO to replace Bob Chapek, Macker said: “Even with the changes, we expect that Iger will continue to emphasize the central role of development. online at Disney.”
Furthermore, “although Iger may not be as business-focused as Chapek, he is generally appreciated by the actors and can help alleviate some of the relationship tension that arose from college. translate,” Macker said.
“Additionally, Iger has a stronger and longer-term track record with investors, which will likely help Disney and him during the transition.”
Comcast: Morningstar analyst Michael Hodel gives the company a wide moat and sets a fair value for the stock at $60. It was recently trading at $36, two-thirds less than fair value.
“Expectations included in the company’s share price are extremely low,” he wrote in a commentary. “We do not expect the single-digit average growth rate to return to the way it has been recently.”
Additionally, “We think investors should focus more on cash flow and capital allocation than on small changes in broadband customer metrics,” Hodel said.
“Comcast generated approximately $3.4 per share in free cash flow over the past year, which has been returned, and subsequently some, to shareholders through buybacks and acquisitions. dividend.”
Looking at potential mergers, “management indicates that at current stock prices, the bar for acquisitions is very high,” notes Hodel. “Given our fair value estimate of $60, we agree that aggressive share buybacks are a great way to increase shareholder value.”
Taiwan Semiconductor: Morningstar analyst Phelix Lee assigns the company a wide moat and sets a fair value for the stock at $133. That’s 62% on recent trades at $82.
Taiwan Semi is the world’s largest manufacturer of specialized contract chips. It creates integrated circuits for customers based on their proprietary designs.
“The company has long benefited from the global shift from semiconductor companies from integrated equipment manufacturers to wireless device manufacturers. [fabrication-less] designers,” Lee wrote in a commentary.
He sees two long-term growth factors for TSMC. “First, the consolidation of semiconductor companies is expected to create demand for integrated systems made with the most advanced nodes,” said Lee.
“Secondly, the organic evolution of artificial intelligence, internet of things, and high-performance computing applications could span decades.”
The author of this story owns shares of Comcast.
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