Sometimes a good stock just has a bad day. Other times, what was once a booming company simply can no longer provide the same returns. Usually, when situations like this occur, expensive stocks get knocked down to a discounted price. Yet, investors should not fear these stocks, rather, they should understand that they can use discounted stocks to buy a higher quantity of shares for a cheaper price if they believe in the future of a company.
It’s worth noting that just because a stock may be trading at a lower price than its fair intrinsic value, that does not mean the stock will certainly go up. In some situations, a discount may become a permanent trading price range unless the company has a catalyst in the works. As such, the stocks discussed in this article are those that may be trading lower now but are likely to rise either as part of the larger stock market run in the future or due to novel products yet to hit the market.
AT&T (T)
America’s largest telecom company by market share. AT&T (NYSE:T) has seen a decrease in growth and overall discount in the last month. Quarter after quarter, the company has struggled to deliver any exceptional innovation that would excite investors and analysts into raising its value. Of course, over the last decade or so, AT&T’s management made a couple of questionable decisions when it decided to buy DIRECTV and TimeWarner only to spin off both at a loss.
Yet, the positive changes have been gradual with AT&T recently restructuring and finding new leadership to reposition itself for growth. Gone is the old management that had made the mistake of attempting to diversify AT&T into a larger broadcasting company. The true upside potential lies in AT&T’s 5G edge, computing networks that it is currently rushing to develop to compete with Verizon’s (NYSE:VZ) incumbent offerings.
Depending on how AT&T implements 5G as an enterprise service and not just a consumer network, the stock could once again return to its days of generous growth.
Bristol-Myers Squibb (BMY)
Coming fresh off a quarterly earnings loss, Bristol-Myers Squibb (NYSE:BMY) has seen its stock price slowly dip over the last six months on average. The pharmaceutical giant has been responsible for developing revolutionary homeopathic drugs. It leads in the blood cancer treatment industry as well.
There are some current concerns regarding the potential for a federal ban on Chinese researchers, such as WuXi Biologics, which actively works together with BMY to produce drugs. However, the company has stated that it has contingencies in place to replace the Chinese firm should it need to.
The company will also likely expand its pipeline through its new intellectual acquisitions, including Mirati, Karuna, and RayzeBio. Moreover, BMY stock is currently trading at nearly 50% its all-time high, implying it could be undervalued for now.
Ametek (AME)
Despite overall strong performance in the last five years and last 12 months, Ametek (NYSE:AME) did experience a discount last month due to the overall market trend. The company has seen surging share value and is likely tp continue to do so. That’s because its products are renowned across the aerospace and defense industries for their reliability and overall accessibility.
Much of this reputation is because Ametek, in many ways, resisted the urge to move its critical manufacturing to China. Thus, it is currently not subject to the concerns that many other manufacturers are having with the Chinese Communist Party.
The company has strategically kept many of its high-profile manufacturing sites in the US with its less stringent ones based out of the Philippines and other more protected Asian countries. As such this company is among the discounted stocks to buy and is likely to continue to return to its growth after the overall stock market trend improves.
On the date of publication, Viktor Zarev did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
