There’s not many better feelings than buying something on a huge discount at a great value. Grabbing a new pair of shoes with a
$99.99 $24.99 price tag is fantastic but doing the same for an investment can be even better.
There might not be official summer sales or clearance runs on stocks but there are certainly times when a stock holds better value than it traditionally does. No, that does not mean every stock under $5 is on sale or that just because an asset is down it is now trading at a discount. The best deals are for stocks that are lower than long-term averages but have strong fundamental health and reasons for optimism of a future bullish run.
One of the best stocks on sale at the moment is the Chinese technology giant, Alibaba Group Holding (BABA). Like most stocks this year and in particular tech stocks, Alibaba shares are down significantly from late September last year. BABA stock is down nearly 50% during that time but is currently trading right at its support level and 52-week low around $77.
The tech giant focusing on e-commerce might be struggling in current market conditions but looks poised to continue its growth going forward. The firm has extremely strong fundamental health and is trading at a great value at its current market price. The average analyst has it as a strong buy and its mean target price is just over double the current stock price. There are few better value buys of stocks with a market capitalization of at least $200 billion.
Tenet Healthcare (THC)
Another great value play comes from Tenet Healthcare Corporation (THC) which, compared to Alibaba, is down “only” 28% over the last 12 months. Despite the smaller fall it has just reached a new 52-week low that is barely below its previous support level.
The healthcare services firm operates 65 hospitals under its subsidiaries and has some of the strongest fundamental metrics of any major stock. The company managed to surpass $8 earnings-per-share (EPS) over the last year with a price-to-earnings (PE) ratio well below average at 6.21. Additionally, its strong growth rate helps push Tenet’s PEG ratio under 1. The stock is currently rated a strong buy by the average analyst and its mean price target is $93.53, an 88% increase from its current price.
If an investor is looking to buy low on a streaming platform, then Paramount Global (PARA) is the absolute way to go. That’s not exactly a compliment for Paramount as the entertainment company has struggled to really get a home run on its new Paramount+ streaming service. Despite that, it is building an impressive catalog of content from all its subsidiaries and is a decent pick to survive the streaming war along with the current leaders such as Netflix, Hulu, Disney, HBO, and others.
Meanwhile, Paramount shares are down more than 50% during that past year leading, to a PE ratio that is below 4 with its $5.19 EPS over the last year. Additionally, the stock offers a dividend yield just below 5% to investors looking for passive income or just wanting to reinvest dividend payments.
Signature Bank (SBNY)
Lastly, investors wanting the best value for financial institutions in the market should keep a close eye on Signature Bank (SBNY). The New York based commercial bank has seen its shares fall 45% the last 12 months but is loved by analysts due to strong earnings trends. The firm is supremely undervalued based on its recent earnings results compared to the current stock price.
Signature currently has a PE ratio of 8 with an extremely strong annual EPS of $18.79. Additionally, its strong growth rate leads to a very solid PEG ratio of 0.78 that points to it being undervalued in the market. To top it off, analysts give the bank a strong buy rating with a mean target price 85% above its current price.