The following guide provides a list of the Best Undervalued Stocks to Buy Now and how to find them.
Some of the best undervalued stocks to buy now include MKTX, PENN, CCL, CHPT, TLRY, and others found in the list below.
Prior to diving into the best-undervalued stocks to buy now, it’s important to figure out what an undervalued stock is and how to find them.
How to Find Undervalued Stocks
As defined by Investopedia, an undervalued stock “is one that has a market price less than its perceived intrinsic value.”
The intrinsic value of a company is the present value of the free cash flows expected to be made by the company.
In other words, an undervalued stock means that the market price is somehow “wrong” and that the investor either has inside information or is making an evaluation based on financial data and some speculation.
The video below is an excellent resource explaining stock multiples and how to find an undervalued stock.
In order to find an undervalued stock, investors must analyze the following metrics:
- Price to Earnings Ratio (P/E)
- Capital Management
- Market to Book Ratio
- Dividend Yield
- Board of Directors & Company Ownership
- Political Scope
The price to earnings (P/E) ratio of a company is defined by Investopedia as “the ratio used to place a value on a company that measures its current share price relative to its per-share earnings.”
In simpler terms, investors analyze P/E ratios to determine the relative value of a stock along with the overall health of a company.
Buying undervalued stocks and holding for the long term is also one of the major keys of “value investing” practiced by Warren Buffet himself.
Investing in undervalued stocks early on is in fact one of the common trends among the world’s best investors, who are also dead:
In addition to single stocks, there are some exchange-traded funds (ETFs) and mutual funds that can be considered “undervalued” based on certain metrics.
On the contrary, an “overvalued” stock is one that has a share price in the market higher than its perceived value.
Important Note: Buying an “undervalued” stock is never 100% guaranteed to generate returns for investors.
Unless investors utilize inside information (which is often illegal), there will always be some speculation involved in the purchase decision.
While Robinhood is the most popular retail trading platform for finding undervalued stocks, all of the stocks in this guide can be traded on any popular brokerage such as Vanguard, WeBull, Fidelity, TD Ameritrade, and others.
See below for our list of the best undervalued stocks to buy now.
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The following list was last updated on Tue, Aug, 31, 2021
As of this writing, all undervalued stocks listed below are currently available for trading on Robinhood and other brokerages.
The best undervalued stocks below are ranked based on the following criteria:
- Company Outlook
- Price to Earnings Ratio (P/E)
- Historical Performance
- Market Cap
*All price to earnings ratios for the companies below were found on YCharts
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Penn National Gaming (PENN) has gained massive popularity ever since purchasing Barstool Sports in 2020. This acquisition alone makes PENN an undervalued stock to keep an eye on.
This is one of the Best Sports Betting Stocks with a market cap above $13 billion and a price-to-earnings ratio hovering around 31.50.
Most notably, since March 2020 PENN has exceeded a return of over 700 percent!
Industry: Gambling & Entertainment
P/E Ratio: 31.51
Market Cap: $12.99 billion
MarketAxess (MKTX) tops our list of the best undervalued stocks to buy now. This company is an electronic trading platform for financial industry professionals.
This New York based company has a market cap exceeding $17 billion and holds a price-to-earnings ratio of around 58.
P/E Ratio: 58.68
Market Cap: $17.84
Alibaba (BABA) is an eCommerce giant commonly referred to as the “Chinese Amazon.” They are based in Hangzhou, China.
This massive online retailer has a market cap towering over $619 billion and a solid P/E ratio at 28.50. This could be a promising buying opportunity!
Industry: eCommerce & Retail
P/E Ratio: 28.51
Market Cap: $619.35B
While the cruise industry got demolished during the pandemic, Carnival Cruise (CCL) is an intriguing and undervalued stock to check out.
Carnival Cruise holds a price-to-earnings ratio under 6 and still carries a market cap exceeding $29 billion.
Industry: Entertainment & Leisure
P/E Ratio: 5.83
Market Cap: $29.18B
ChargePoint (CHPT) is another beneficiary of the electric vehicle (EV) craze among growth investors. ChargePoint is an EV charging network provider.
This California based company has a market cap close to $11 billion and holds a respectable P/E ratio between 35-36.
Industry: Automotive & Technology
P/E Ratio: 35.66
Market Cap: $10.98B
Fubo TV (FUBO) is another undervalued stock on this list. This company is best known for its live TV service, but is also involved in sports gambling!
Fubo TV has a market cap of over $4 billion and carries a strong P/E ratio of around 32.
P/E Ratio: 32.06
Market Cap: $4.49B
Simon Property Group (SPG) is a well-known real estate investment trust (REIT) that manages thousands of real estate properties. Their portfolio is heavy on shopping malls and retail outlets.
Not only does Simon Property Group pay a solid dividend of 4 percent, but its P/E ratio sits between 36-37 and touts a market cap of over $50 billion.
Industry: Real Estate
P/E Ratio: 36.86
Market Cap: $50.98B
Finishing our list of best undervalued stocks to buy now is Tilray (TLRY)! This is a Canadian cannabis stock that is heavily traded among Robinhood users.
This cannabis company is expected to take off as the legalization of marijuana in the United States progresses.
Tilray has a P/E ratio between 17-18 and has a market cap exceeding $8.5 billion.
P/E Ratio: 17.83
Market Cap: $8.86B
Overall, these are the best undervalued stocks to buy now in 2021 and beyond. Always be sure to invest responsibly!
More Stock Ideas
Refer to the video below for even more undervalued stock ideas.
Some of the undervalued stocks mentioned in the video include Toyota, Honda, Qualcomm, and others.
Check out our most popular articles that have been read by thousands of unique visitors.
Frequently Asked Questions
What are the best undervalued stocks to buy now?
The best undervalued stocks to buy now are MKTX, PENN, CCL, CHPT, TLRY, and others found in this guide.
What are undervalued stocks?
Undervalued stocks are company stocks that have a market price less than its perceived intrinsic value.
How do you find undervalued stocks?
You can find undervalued stocks by analyzing a companys price to earnings ratio, market to book ratio, and other strategies outlined in this guide.
Are undervalued stocks a good investment?
Undervalued stocks have historically been very good investments if purchasing at an undervalued share price and holding until the price appreciates. Always be sure to assess the risk of any investment prior to buying.
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