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I think there are some great opportunities to buy stocks that are trading below their intrinsic value right now. Rising interest rates and the prospect of a recession are pushing investors toward dividend stocks.
However, the best-valued stocks are the ones that are falling behind. With the stock market looking the other way, I see some old favorites trading at bargain prices.
right movement
right movement (LSE:RMV) has been one of the worst performers FTSE 100 actions in the last year. While the index advanced 14%, the stock fell 13%.
However, as far as I can tell, that has almost nothing to do with the underlying business. The stock might have been expensive a year ago, but today it looks undervalued.
Revenue in 2022 grew 9% and earnings per share grew 10%. And the company maintained its dominant position in the market, with a high amount of time on its platform.
Best of all, the company has shown that it is largely immune to most macroeconomic threats. Neither rising inflation nor a shaky housing market could slow the business down.
A change in CEO carries a risk of some kind. But with no debt and strong cash conversion metrics, I think this is one of the best FTSE 100 stocks to buy and hold for the long term.
JD Wetherspoon
He FTSE 250 it’s up about 5% in the last 12 months. But that’s not thanks to JD Wetherspoon (LSE:JDW), whose shares are down 23% and look like a bargain to me.
The amount of debt on the company’s balance sheet constitutes a risk. But I think the market is significantly overestimating this risk, which makes the stock price too low.
Most of the debt is pegged through 2031 at 1.24%, so there is a time until that becomes an issue. And the company has been taking advantage of a difficult time for the industry to secure its position.
Wetherspoon has been investing heavily in its pubs. She has also been working to keep her prices low for customers, which I think will be crucial in the long run.
Today’s lower prices give the business the ability to increase prices in the future while still being cheaper than its competitors. I believe this will boost the long-term profitability of the company.
Alphabet
Shares in Google’s parent company Alphabet (NASDAQ:GOOG) have fallen about 25% over the past year. That has created the kind of buying opportunity that doesn’t come along very often.
There are a couple of risks with stocks right now. The emergence of ChatGPT as a threat to Google Search is one, and the latest antitrust lawsuit against Google Maps is another.
However, I don’t see any of these as a threat to Alphabet’s long-term growth. Despite a PR blunder, I don’t think ChatGPT is obviously superior to Alphabet’s own AI search offering.
Also, antitrust lawsuits come and go for big tech companies. I suspect that any fine that is imposed is unlikely to be significant in the grand scheme of things.
Meanwhile, analysts expect 21% annual growth in earnings per share through 2027. If that happens, then the stock is cheap with a price-earnings (P/E) ratio of 20.
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