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3 Stocks to Buy and 3 to Sell Now
As we dive deeper into 2024, there are both strong opportunities to capitalize on...
Kenny
September 13, 2024
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THE MONEY IDEA💡
3 Stocks to Buy and 3 to Sell Now
Welcome to Money Masters!
As we dive deeper into 2024, there are both strong opportunities to capitalize on undervalued stocks and a few overvalued ones that investors might want to consider letting go of. Here are insights of the six companies with the help of Morningstar experts.
Let’s dive in.
THE MONEY IDEA💡
3 Stocks to Buy
37% Undervalued: Kraft Heinz trades at a 37% discount to its fair value, making it an attractive option for value investors.
Revamped Strategy: The company has shifted focus from cost-cutting to reinvesting in its iconic brands, which should support long-term growth.
Improved Efficiency: A strengthened cost structure will help the company navigate inflation and maintain margins in a challenging market.
Solid Dividend Yield: Offering a 4.5% dividend yield, Kraft Heinz rewards investors while they wait for the stock to recover.
Brand Strength: With a wide array of household brands, Kraft Heinz continues to dominate the global food and beverage industry.
20% Undervalued: Trading at a 20% discount to its fair value, Medtronic offers a compelling entry point for long-term investors.
Aging Population: Medtronic is well-positioned to benefit from the increasing demand for medical devices as the global population ages.
Earnings Growth: With a projected earnings growth rate of 11.3% over the next five years, the company has strong upside potential.
Dividend Income: A dividend yield of 3.1% provides a steady income stream for investors.
Market Leader: Medtronic’s leadership in pacemakers, heart valves, and insulin pumps gives it a competitive edge in the healthcare sector.
8% Undervalued: Evergy is one of the cheapest U.S. utilities, trading at an 8% discount to fair value.
Stable Dividend: The stock boasts a strong dividend yield of 4.3%, making it a great pick for income-focused investors.
Growth Potential: Improving fundamentals could lead to management boosting its earnings growth outlook, driving stock price appreciation.
Defensive Play: Utilities are a go-to for investors seeking safety during market volatility, and Evergy’s stable business model makes it a top choice.
Undervalued Sector: Evergy offers a great opportunity to gain exposure to an undervalued sector with significant upside potential.
The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
THE MONEY IDEA💡
3 Stocks to Sell
72% Overvalued: Costco’s stock trades at a 72% premium to its fair value, making it significantly overvalued.
Expensive Defensive Stock: While Costco’s business model is solid, its current valuation makes it an expensive defensive play in today’s market.
High P/E Ratio: With a forward price-to-earnings ratio of 50, the stock’s growth potential may already be fully priced in.
Narrow Margins: Rising costs due to inflation could squeeze Costco’s margins and limit earnings growth.
Slowing Growth: Membership and same-store sales growth are slowing, suggesting the stock’s best days may be behind it.
56% Overvalued: Eli Lilly’s stock is trading at a 56% premium to its fair value, making it a 1-star-rated stock by analysts.
Weight-Loss Drug Competition: While the company’s weight-loss drugs have spurred growth, increased competition could eat into market share.
Limited Upside: With the stock having tripled in price since its drug approval, future growth is already priced in, leaving little room for error.
Risks Ahead: Potential side effects or reduced long-term demand for its drugs could negatively impact Lilly’s future earnings.
Unsustainable Valuation: At its current price, Eli Lilly’s stock may not justify the high expectations built into its valuation.
26% Overvalued: Southern Company is trading at a 26% premium to its fair value, making it an expensive utility option.
Limited Growth Prospects: Southern’s current valuation leaves little room for future growth, especially with its recent stock run-up.
High Valuation for a Utility: Utilities typically offer stable but lower growth, and Southern’s high valuation may not align with its growth potential.
Dividend Yield: While the dividend yield is attractive, better opportunities exist in the utility sector with more room for growth.
Overextended Stock: Southern’s impressive performance this year may have run its course, making now a good time to take profits.
The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
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