7 Undervalued Stocks for Long-Term Stability
If you’re looking to get richer in 2024 and beyond, it would be wise not to stocks that are on sale right now. Buying undervalued long-term stocks is a great investment strategy because it provides access to stocks that are selling below their expected market value.
Undervalued long-term stocks can best be described as stocks that are underpriced because of fundamental measurements, and have a long investment window. For instance, a price-to-earnings ratio is a common measurement of a stock’s value, as is price-to-sales and price-to-book, which compares the company’s market value to its book value that reflects its tangible assets.
Undervalued long-term stocks also often have positive qualities such as stable or growing earnings, revenue growth and positive analyst sentiment.
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The Portfolio Grader is an excellent tool for identifying undervalued long-term stocks because it considers revenue growth, earnings performance, momentum and other metrics. By using the Portfolio Grader and examining a stock’s fundamentals, you can identify some undervalued stocks that provide excellent opportunities for long-term stability in your portfolio.
Nvidia (NVDA)
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Is it really possible that a stock like Nvidia (NASDAQ:NVDA) could still be on a list of undervalued long-term stocks? This company took Wall Street by storm in 2023 as keen interest in generative artificial intelligence created massive demand for Nvidia’s chips.
Nvidia’s revenue for the fiscal third quarter of 2024 was $18.12 billion, up 206% from a year ago when it was $5.93 billion. NVDA stock is up 237% this year and the company’s market capitalization soared to $1.2 trillion.
Nvidia has a forward P/E ratio of nearly 25, with a P/S ratio of 27 and a P/B of 36.2. Those numbers may look high at first glance, it’s easier to digest when you consider analysts are calling for earnings growth of greater than 50%. Clearly, Nvidia has a lot of room left to run.
Then look at another measurement, the price-to-earnings-to-growth ratio. Nvidia currently has a ratio of 0.5, which is much lower than any of the other “Magnificent Seven” stocks and below the S&P 500 PEG ratio of 2.
I think you can be confident in Nvidia. It gets an “A” rating in the Portfolio Grader.
SoFi Technologies (SOFI)
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Not only is SoFi Technologies (NASDAQ:SOFI) one of the best fintech stocks you can own today, but it’s also undervalued. That makes it a compelling play as we head into 2024.
SoFi provides banking services for online customers with finance products ranging from student loan refinancing, mortgages, credit cards and personal loans.
The company struggled over the last few years because the federal government placed a moratorium on student loan repayments as part of the Covid-19 relief effort.
But now that the moratorium lifted SoFi is finally collecting those payments again. That’s an immediate benefit to the bottom line.
SoFi’s P/S ratio of 4.8 is a vast improvement from the 13.2 it had in December 2021. And SoFi’s revenue jumped 27% in the third quarter to $531 million.
SOFI stock gets a “B” rating in the Portfolio Grader.
Marathon Digital (MARA)
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Marathon Digital (NASDAQ:MARA) is a must-have stock if you’re bullish on cryptocurrency. The company is one of the best-known crypto miners operating on the Nasdaq exchange.
Marathon Digital has geographically diversified mining operations and is committed to becoming the world’s top Bitcoin (BTC-USD) mining company. It produced 1,151 Bitcoin in November, an average of 38.4 per day, which is 144% better than its production a year ago.
And Marathon just closed a deal to buy two more mining sites totaling 390 megawatts of capacity.
Many people are understandably wary of investing in cryptos, which are unregulated. But it’s also hard to resist an asset that’s grown as much as Bitcoin in recent years.
Although there’s no Bitcoin ETF, Marathon Digital stock can be used as a proxy.
MARA stock gets an “A” rating in the Portfolio Grader.
Li Auto (LI)
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Chinese automaker Li Auto (NASDAQ:LI) continues to impress. The company is rapidly growing and a legitimate contender in the electric vehicle market, pending sustained growth and recognition as an undervalued long-term stock.
Li delivered 41,030 vehicles in November, an increase of 172.9% from the year. That makes the second consecutive month that it reached the 40,000-mark, positioning Li as a top producer of Chinese-made EVs.
In the third quarter, Li posted revenue of $4.61 billion, an increase of 271% from a year ago.
Its forward P/E ratio of 31 is a marked improvement from a year ago when it was nearly 110. The P/S of 3.3 and P/B of 4.5 are reasonable, particularly for a company growing as fast as Li.
LI stock has an “A” rating in the Portfolio Grader.
CrowdStrike Holdings (CRWD)
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CrowdStrike Holdings (NASDAQ:CRWD) is a global cybersecurity company. It operates a cloud-based platform called Falcon that works as a security-as-a-service model to prevent malware and intrusions while providing endpoint security and threat intelligence.
It uses artificial intelligence to monitor billions of data points to evaluate behaviors that are typical and what can be considered malicious, giving it a head start in preventing bad actors before they can strike.
That helps Falcon learn and evolve over time, making it an ideal company for customers looking to protect their networks.
Revenue in the third quarter was up 35% from a year ago to $786 million, while subscription revenue was up 34% to $733.5 million.
And its PEG ratio (price-to-earnings-to-growth) is only 2, making it an appealing and undervalued play. CRWD stock gets an “A” rating in the Portfolio Grader.
Samsara (IOT)
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Samsara (NYSE:IOT) is a tech company that supplies hardware and software that businesses use to track their transportation fleets.
From locating where a truck is to what it’s hauling, Samsara’s platform uses artificial intelligence to help companies keep track of their goods.
And it’s also a great tool for monitoring vehicle performance, operator performance, speeding, tailgating and other driving behaviors that could be unsafe and potentially drive up insurance rates.
With supply chain issues at the forefront of many suppliers’ minds, Samsara can help businesses manage their products.
The stock has an amazing 2023 gain of more than 170%. Revenue in the third quarter was up 40% from a year ago to $237.5 million. And customers with annual returning revenue of more than $100,000 jumped by 49% over the last year to 1,663.
IOT stock has a “B” rating in the Portfolio Grader.
Snowflake (SNOW)
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Snowflake (NYSE:SNOW) is a cloud computing company based in Montana. The company’s data-as-a-service platform helps users store and analyze data points using the company’s cloud-based software.
That means companies don’t have to keep their data siloed in different places and ensure that users always access the most up-to-date information.
Snowflake’s data cloud also has the capability to connect multiple public clouds, which is important when companies are attempting to use AI-powered applications.
Snowflake also announced the purchase of Samooha, which is a startup that provides a cross-cloud data collaboration product that should fit in well with Snowflake’s mission.
Snowflake has a decent PEG ratio of 2.5, and strong revenue growth ($698.5 million in the third quarter of fiscal 2024, up 34% from a year ago). It gets a “B” rating in the Portfolio Grader.
On the date of publication, Louis Navellier and the InvestorPlace Research staff member primarily responsible for this article had long positions in LI and NVDA. Neither held (either directly or indirectly) any other positions in the securities mentioned in this article.
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