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Five Companies Set To Bounce Back
Kenny
February 14, 2025
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Five Companies Set To Bounce Back
Welcome to Money Masters!
This report highlights five companies set to bounce back, offering strong potential to investors. Gathered by Morningstar experts, these selections are based on resilience, undervaluation, and strategic positioning for future growth.
Let’s dive in.
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5 Strong Worldwide Stocks
Current Status: Trading at a 16% discount to fair value, a leader in semiconductor manufacturing.
Semiconductor Industry Leader: ASML is the key supplier of lithography machines used in advanced chip production.
AI and Tech Boom Beneficiary: Increasing demand for AI and high-performance computing fuels long-term growth.
Strong Market Position: ASML holds a near-monopoly in extreme ultraviolet (EUV) lithography, essential for leading-edge semiconductor manufacturing.
Resilient Growth: The company’s technology is essential for advanced semiconductor manufacturing, ensuring continued demand.
Long-Term Investment: With rising AI adoption, ASML’s critical role in chip production makes it a strong long-term investment.
Current Status: Trading at a 26% discount to fair value, offering strong growth potential in the energy sector.
Undervalued Energy Sector: Energy stocks remain among the most discounted in the market, and Schlumberger stands out as a key player.
AI Integration in Oil Services: The company is leveraging AI for digital services to optimize oilfield operations and asset management.
Diversified International Exposure: Unlike competitors focused primarily on North America, Schlumberger has a significant global presence, benefiting from rising international exploration.
Resilient Demand for Energy Services: As oil demand remains steady and new exploration projects gain traction, Schlumberger is well-positioned for growth.
Share Buyback Program: A sizable share repurchase plan in 2025 should provide strong technical support for the stock and benefit long-term shareholders.
Current Status: Trading at a 22% discount to fair value with a strong market position in AI and digital advertising.
AI Leadership: Alphabet boasts a full-stack approach to AI, encompassing infrastructure, software, and applications, making it a leader in the space.
Strong Cloud Growth Potential: While cloud revenue growth has decelerated recently, the company's ongoing investments in infrastructure position it for reacceleration in the second half of the year.
Advertising Strength: Despite market fluctuations, Google remains a dominant force in digital advertising, leveraging AI for improved monetization.
Economic Moat: Alphabet benefits from network effects, high switching costs, and strong brand equity, giving it a durable competitive advantage.
Resilience to Market Volatility: Despite recent setbacks, Alphabet’s diverse revenue streams make it a solid long-term investment.
Current Status: Trading at an 18% discount to fair value with a 5.8% dividend yield, making it a strong value play.
Amazon Contract Adjustments Priced In: While Amazon is reducing its UPS shipping volume, the impact on UPS’s overall revenue mix is mitigated by higher-margin business elsewhere.
Improving Margins: UPS is expected to increase domestic operating margins from 9% in 2025 to 12% by the end of 2026.
Post-Pandemic Demand Stabilization: After a surge in demand in 2020-2021, UPS has adjusted to new market conditions and continues to optimize operations.
Attractive Valuation: The stock trades at just under 14 times 2025 earnings and 12.5 times 2026 earnings, presenting an attractive entry point.
Strong Dividend Yield: UPS offers a nearly 6% dividend yield, making it a solid choice for income-focused investors.
Current Status: Trading at a 13% discount to fair value, a strong defense sector play.
Defense Sector Stability: Government defense spending remains robust, ensuring steady revenue streams.
High Dividend Yield: Lockheed Martin offers a solid 2.9% dividend yield, making it an attractive income stock.
R&D and Innovation: The company continues investing in next-gen defense technologies, securing long-term contracts.
International Demand: Increased geopolitical tensions boost global demand for Lockheed Martin’s defense systems.
Margin Expansion: The company is optimizing operations to improve profitability, enhancing shareholder value.
For a guide on investing and building wealth, get The Money Master Blueprint.
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