Let’s explore this concept and look at three stocks that currently appear undervalued. Here are 3 cheap stocks.
Black Friday is a “thing” because people love bargains. The allure of a bargain is hard to resist, on or off Wall Street. When it comes to stocks, what exactly makes a stock « cheap », and how can investors identify good bargains? My experience taught me that value, like beauty, is subjective and in the eye of the beholder. Let’s explore this concept and look at three stocks that currently appear undervalued.The Value Investor’s Mindset
Value investing, popularized by Benjamin Graham and Warren Buffett, is about finding stocks trading below their intrinsic value. This approach requires patience, as it can take time for the market to recognize a stock’s true value.
Value Is Subjective
There are many (different) ways to define value on Wall Street. A common mistake is to look at the absolute price per share. A stock trading at $5 isn’t necessarily cheaper than one trading at $500. According to to a source at CheapBargainStocks.com, a website that helps people find undervalued stocks, value investors look at the stock’s value relative to the company’s fundamentals.
Here are four metrics that value help investors gauge whether a stock is cheap:
There are more, these are just a few of the metrics people use to determine if a stock is cheap. It’s crucial to remember that a stock isn’t necessarily a good investment just because these metrics suggest it’s cheap. Sometimes, stocks are cheap for good reasons – perhaps the company faces significant challenges or operates in a declining industry. I spoke to a long time value investor and he said, “The key is to find stocks that are cheap relative to their intrinsic value and future prospects.”3 Potentially Undervalued Stocks
With these principles in mind, let’s look at three stocks that appear cheap and sport a P/E ratio below 10 and are expected to grow in the future.Tenet Healthcare Corporation: Ticker THCP/E Ratio 4.
