11 Undervalued Stocks To Buy Today
Summary
Joseph argues that the S&P 500 and QQQ gains are misleadingly narrow, driven primarily by a handful of semiconductor and AI firms. To capitalize on this, he suggests a 'core-satellite' strategy, maintaining 50% of a portfolio in broad ETFs like VOO or SCHG and 50% in individual stocks. He focuses on identifying high-quality companies that are trading at the lower end of their historical valuation ranges despite maintaining strong fundamentals.
Beyond individual stock picks, Joseph analyzes the broader tech ecosystem, noting that the demand for AI is creating a secondary wave of demand for memory chips, which significantly benefits companies like ASML. He also addresses recent inflation reports, suggesting that while energy costs remain a concern, inflation may have peaked. Finally, he warns against the 'casino-like' behavior of the market, specifically criticizing new leveraged ETFs designed to track the SpaceX IPO, which he labels his 'fail of the week.'
Mentioned Stocks
Reasoning: Joseph likes the diverse business segments and historical low PE. He sets a price target above $300 per share.
Reasoning: Down 27% from highs, Joseph views Meta as super profitable and believes their massive CapEx spend on compute infrastructure is a long-term positive.
Reasoning: The stock is near all-time highs. Joseph continues to hold his shares due to strong demand for memory chips but is not buying more at current prices.
Reasoning: The stock is 27% off its highs and Joseph believes the heavy CapEx spend is predictable and will yield high returns through their software ecosystem.
Reasoning: Despite being Joseph's largest position, he believes it is currently too expensive on a free cash flow basis and advises waiting for a better entry point.
Reasoning: Joseph highlights the reasonable valuation and expects beef prices to go down in the future while organic growth continues.
Reasoning: Joseph explicitly states he has 'added more and more to it as it's gone down in price.' He believes in the platform's long-term digital education story despite its 74% drop from highs.
Reasoning: Joseph notes the stock is 18% off its highs and at the bottom of its 5-year historical valuation. Revenue and EPS continue to grow in the high teens.
Reasoning: Down 38% from peak with a PE of 26. Joseph states the company is growing EPS and gaining market share.
Reasoning: Similar to S&P Global, Joseph finds it undervalued based on historical PE and cash flow, noting it is a high-quality business difficult to disrupt.
Reasoning: Joseph argues that the valuation is currently too expensive and the stock price has moved ahead of its intrinsic value.
Reasoning: Joseph states the stock is down 26% from highs and trading at the bottom of its 5-year historical valuation range for both PE and free cash flow. He highlights a 21 forward PE as a great deal for a high-quality company.
Reasoning: Down 31% from highs. Joseph argues that while the PE looks high, the earnings are growing very quickly and it is historically cheap on a cash flow basis.
Reasoning: Down 46% from highs. Joseph cites strong rural expansion and analyst price targets that are nearly double the current price.