A quick list of the most oversold and undervalued stocks to look out for this year.
Some people just don't know what something is worth until they surprise you. Some, if not most, investors are unaware that some stocks are simply priced for too low than what they're valued or what they are about to be valued as soon things come back to normal.
The pandemic has instilled in us such a sense of the new normal of things that we forget what the stocks and market were like before it. We also forget to remember that there is an end to the current state of things and, soon, the market will recover from the stresses put by restrictions. As an investor, capitalizing on the stocks being oversold and undervalued can put you in the perfect position to see profits once the market is allowed to return at full force.
All that's left is identifying correctly which stocks are oversold and which are just simply not as valuable as they used to be. This can be very difficult as it takes time, experience, and research to identify correctly when a company is on its way to massive increases of share value. Luckily, we've researched for you and now present the 10 most oversold stocks of 2021:
The Most Oversold Stocks of 2021 (So Far)
1. Berkshire Hathaway (NYSE: BRK.A)
Market Value: $638.67 Billion
The child of Warren Buffet, this company underperformed in the S&P 500 through different points in the 2010s and was hit especially hard in 2020 since the market favored more fast-growing tech companies due to the demands of the pandemic.
That being said, analysts point to a bright horizon for the holding's company since it currently owns the largest railroad in the United States, an energy and utility conglomerate, and various other enterprises that span industries from food to clothing -- all of which are industries expected to explode once restrictions are lifted.
On top of that, Berkshire also owns significant stakes in massive corporations like Apple, Bank of America, and Coca-Cola just to name a few. The diverse portfolio of holdings allows the company a lot of wiggle room financially while also protecting it from a major market crisis. The diversity of the company's holdings will also bring much income for it as soon as the market opens completely.
2. Target (NYSE: TGT)
Market Value: $126.67 Billion
Target is not only undervalued as a stock, it is also grossly overlooked as a viable source of dividend income. If you're an income investor looking for passive income, one thing you should know about Target as an investment is that they have consistently been paying out dividends to their shareholders for the past 50 years.
Originally a big-box store, Target has managed to expand its offering to be more of a one-stop-shop for anything a buyer might need. This, along with its development of an online platform, means that the company is definitely keeping up with competition -- continuing to see profits even during the pandemic.
Another indicator of the reach of the brand and how undervalued it is as stock is a fact that every American lives not more than 10 miles from a Target store. In that regard, Target stores are more than stores, they are distribution centers that many businesses depend on.
In the coming years, Target expects to see profits grow as much as $4 billion.
3. IBM (NYSE: IBM)
Market Value: $126.25 Billion
The historic technology company might not be at the forefront of the consumer's attention, it is still a massive player in its industry with a reach spanning all over the globe. Though it struggling to keep up with the likes of today's tech companies, IBM has a history of adapting to the times over the decades and is poised to do the same in the coming years.
It has recently been announced that by the end of this year, IBM will be split into separate entities with each its own target market. What investors should be on the lookout for is the division that seeks to deal with the hybrid cloud market, offering services ranging from data center construction to software development.
It will definitely be interesting what IBM has to offer in that regard that's any different from what's already in the market. With cloud technology a growth industry that is estimated to make the companies that deal in it $1 trillion a year, there's definitely a lot of potentials for IBM to take a good share of this kind of market.
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4. JPMorgan Chase (NYSE: JPM)
Market Value: $462.73 Billion
JPMorgan Chase is a retail financial services and investment banking giant that is estimated to manage roughly about $3 trillion worth of assets worldwide. Though their presence is not strongly felt in most US cities, the firm is currently expanding its reach to emerging markets abroad. Its activities in China are particularly noteworthy and, as more and more nations begin to come into their own, JPMorgan Chase stands to earn itself and its investors even more money.
With all this, it's surprising that the company is trading about the same way other banking institutions are. With investments and technology and a myriad of growth drivers, an investor would be wise to take advantage of its oversold status while prices are still somewhat affordable.
5. Disney (NYSE: DIS)
Market Value: $321.40 Billion
This might come as a shock to you that, as it stands, Disney stocks are oversold and do not reflect the actual value the company has to offer. With Disney+ taking over the online streaming market, it seems things could not be better for Disney.
But consider for a moment the main driver of profits for Disney that has been missing-in-action since the start of the pandemic. Theme parks and movies are two things that Disney is a giant at that has been hurt since the start of the pandemic. With restrictions towards going out and gathering in groups, there's very little the theme parks and movies can do to fully express their earning potential.
Now that the pandemic seems to be winding down, and more and more people can go on vacations or to the cinemas, we can expect Disney profits to swell even more with the return of its two profit generators.
6. ViacomCBS Inc. (NASDAQ: VIAC)
Market Value: $26.85 Billion
The multinational media and entertainment company's stock are definitely not as expensive as its counterparts in the market. In fact, part of the reason why the stocks of ViacomCBS are considered to be undervalued is due to a mistake in asset allocation at the beginning of the year. This highly publicized mistake created an artificial dip in the stock's prices which fell 60% from March.
That being said, the lowered stock prices do not accurately reflect the company's offering. With its entrance to the video streaming race with Paramount+ which is expected to acquire about 70 million subscribers. This along with the other offerings in the media and entertainment market means a lot is definitely on the horizon for ViacomCBS in terms of profits.
7. Alibaba Group Holding Limited (NYSE: BABA)
Market Value: $572.26 Billion
Beginning as essentially the "Amazon of China", the company has since expanded to provide cheap retail and wholesale goods to people all over the world. On top of that, Alibaba offers services like core commerce, cloud computing, digital media and entertainment, and innovation initiatives just to name a few.
Founded in 1999, the company has come to consistently see growth over the last 2 decades. And with the growth of dropshipping businesses, it seems that Alibaba's clientele will extend to more and more e-commerce businesses as well.
Since the start of the pandemic, online shopping saw an explosion that Alibaba benefited greatly from. On top of this, the company is also looking to expand into the financial technology market with its partnership with the Ant Group. This is the group that owns Alipay -- the largest mobile payment platform in China alone.
Once Ant Group is finally allowed to go public, we can definitely expect the value of Alibaba as a whole to skyrocket -- making investors who bought their stocks now pat themselves on the back.
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And that was the list of the 7 most oversold stocks currently available in the market. The current market as it stands is looking pretty good.
Though there are still some uncertainties with regards to how quickly the world can return to normal market-wise, investors are looking quite optimistically at the entertainment and technology sectors to be the main drivers of growth.
Of course, no conclusion is complete without a reminder to you, as the investor, to practice due diligence and research as much as possible before investing. If there's anything the pandemic has taught us is the value of caution and diversification of portfolio.
Keep on top of market news and research each of the companies' performance histories to gauge how well they might perform in the future.