At Extreme Investor Network, we believe that finding stocks with strong earnings potential and discounted valuations can be a smart way for investors to uncover value in the market. In a time where artificial intelligence is driving Wall Street’s upward trajectory, it’s essential for investors to identify stocks that have not yet participated in the market’s rally.
While AI is dominating the headlines with companies like Nvidia, Broadcom, and Qualcomm leading the charge, it’s also crucial to look beyond the popular picks and uncover hidden gems that have the potential for significant growth.
One strategy we recommend is to screen for S&P 500 stocks that are discounted compared to the broader market while meeting specific criteria. These criteria include maintaining a price-earnings ratio that is at least a 25% discount compared to its five-year P/E, having averaged more than 5% earnings per share growth in the last three years, and being in the green for the first half of the year.
For example, oil major Chevron has made the list with shares up more than 6% in 2024. Despite facing challenges such as declining natural gas prices, Chevron’s CEO remains optimistic about the company’s future thanks to the growing demand for natural gas driven by the rise of data centers and AI applications.
Another company worth considering is FedEx, with shares inching up more than 1% in 2024. With a trailing 12-month price-earnings ratio that is 29% lower than its five-year average, FedEx continues to show promise for investors. Analysts are hopeful that ongoing margin improvement will support the stock in the long run.
Additionally, Altria Group stands out as one of the most discounted stocks on the list, with a trailing 12-month P/E representing a 116% discount compared to its five-year average. Despite regulatory challenges in the tobacco industry, Altria Group has seen a nearly 15% climb in 2024, supported by recent FDA approval for its NJOY menthol electronic cigarette.
Other discounted names to keep an eye on include Conagra Brands and Marathon Petroleum. By using screening tools like the CNBC Pro Stock Screener, investors can customize their search and uncover undervalued opportunities in the market.
At Extreme Investor Network, we are dedicated to providing valuable insights and strategies to help investors navigate the ever-changing market landscape. Stay informed, stay ahead, and uncover value in unexpected places with our expert guidance.