Undervalued stocks are those that are trading at a price below their intrinsic value. In other words, they are selling for less than what they are actually worth. There are a number of reasons why a stock may be undervalued, including low earnings, poor future prospects, or negative publicity. However, for savvy investors, undervalued stocks represent an opportunity to buy shares at a discount and then sell them later for a profit.
How To Identify Undervalued Stocks
There are several ways to identify undervalued stocks. One approach is to use valuation ratios, such as the price-to-earnings ratio or the price-to-book ratio. Another approach is to compare the market value of a stock to its intrinsic value. This can be done using various valuation models, such as the discounted cash flow model or the relative valuation model.
Investing in undervalued stocks comes with certain risks. The most obvious risk is that the stock may never reach its intrinsic value. This can happen if the company’s earnings potential is overstated or if the market simply doesn’t recognize the stock’s true worth. However, many investors believe that the potential rewards of investing in undervalued stocks outweigh the risks. If this has you interested in searching for undervalued stocks, here are two to watch in the stock market today.
Undervalued Stocks To Watch Right Now
1. Alphabet (GOOGL Stock)
Alphabet Inc (GOOGL) is an American multinational conglomerate and is the holding company for Google. The company is the world’s third-largest technology company by revenue. Alphabet’s portfolio encompasses several industries, including the internet, software, hardware, and consumer products. Some of its most well-known brands include Google, YouTube, Android, and Nest. Meanwhile, as of October 18, 2022, the company has a P/E ratio of 18.8.
GOOGL Recent Stock News
At the end of last month, Alphabet announced it will release its third-quarter 2022 financial results on Tuesday, October 24, 2022, after the close of the U.S. stock market. Also in September, the company announced that they have completed the acquisition of cyber defense company Mandiant (NASDAQ: MNDT).
In detail, Mandiant will be added to Google Cloud under the Mandiant brand. With this acquisition, Google Cloud and Mandiant will be working together to deliver an end-to-end security operations suite.
Moreover, Thomas Kurian, CEO of Google Cloud commented, “The completion of this acquisition will enable us to deliver a comprehensive and best-in-class cybersecurity solution. We believe this acquisition creates incredible value for our customers and the security industry at large. Together, Google Cloud and Mandiant will help reinvent how organizations protect themselves, as well as detect and respond to threats.”
GOOGL Stock Chart
As of Tuesday’s closing bell, shares of GOOGL stock are trading at $100.77 a share. Additionally, GOOGL stock is still down 30.50% year-to-date.
2. Meta Platforms (META Stock)
Next up, Meta Platforms Inc. (META) doing business as Meta and formerly named Facebook Inc. is an American multinational technology conglomerate. The company owns Facebook, Instagram, Oculus VR, and WhatsApp, among other products and services. As of October 18, 2022, Meta Platforms is trading at a PE ratio of 11.0.
META Recent Stock News
Earlier this month, the company announced it will be reporting its 3rd quarter of 2022 financial results after market close on Wednesday, October 26, 2022. Just to recap, in the second quarter of 2022, META reported a miss for the quarter. Specifically, the company posted Q2 2022 earnings of $2.46 per share, with revenue of $28.8 billion.
META Stock Chart
To close out Tuesday’s trading day, META stock is trading at $132.80 a share. Though, shares of META stock are still down 60.77% so far in 2022.