The best undervalued stocks are those that are priced below their proposed intrinsic value. Such types of securities provide good long and short term investment opportunities for beginners and professionals alike. Most of the time, these shares provide significant gains in the future. Determining such stocks beforehand can pose a considerable reward for you; therefore, for our list, we have selected the ten best undervalued stocks to look out for in 2021.
What are the best undervalued stocks?
There are many undervalued stocks currently on the market. We’ve recently seen this with the GameStop saga. Overall, the US stock is open to all traders globally to participate and contribute to the volatility and liquidity. The supply and demand for a security cause an increase or decrease in its price, which participants then capitalize on undervalued stocks as with $GME.
An excellent example of trading the best undervalued stocks comes from a trader who identifies potential security, say Y, at $100 in value. Realising that the shares are significantly undervalued, he buys a thousand of them. Over the year, the stock rises to $200, which gives our trader an ROI of 100%.
What are the trading hours for the best undervalued stock?
These stocks can be traded during normal market hours. In the US, the New York Stock Exchange (NYSE) and the Nasdaq Stock Market (Nasdaq) are open from 9:30 a.m. to 4 p.m. Some pre and post-market is also available, extending the trading day by 3 to 4 hours.
Online brokers can provide you with a direct link to an exchange so that you can trade and manage your account at your comfort from virtually anywhere in the world. As stated before, the best undervalued stocks are always under the radar of big banks, investors, and retail traders due to the enormous amount of profit potential.
Trading The Best Undervalued Stocks in 3 Steps
Open a trading account
Register an account with your broker of choice by visiting their website and clicking the sign-up button. You may need to verify your email address and your identity.
Make a deposit
Make a deposit with a credit/debit card, bank transfer, etc., depending on the options available.
Begin trading the markets with proper risk management, psychology, and strategy.
Where can I trade the best undervalued stocks?
Investing in the stock market is made simple these days through the use of brokers. They help you out by providing the best trading services through their own or third party platforms. In a market where the failure rate is nearing 95%, trading through a brokerage can help you be in the winning 5%.
We've shortlisted the best undervalued stocks to buy in 2021 and you can start trading them in our recommended brokers by clicking on the buttons of the following table.
Which is the best undervalued stock to trade?
It is essential to have the best undervalued stocks in your list of securities that you trade. They can provide good long-term gains and sometimes are also beneficial in the short-term as well. The following are the best undervalued stocks to trade in 2021:
- Advanced Micro Devices AMD
- Heico Cooperation HEI
- Ambarella AMBA
- Novavax NVAX
- Criteo CRTO
- Aarons AAN
- Qualcomm QCOM
- Acuity Brands AYI
- Grand Canyon Education LOPE
- IBM IBM
Advanced Micro Devices AMD
Advanced Micro Devices has started 2021 in competition with top graphics and CPU companies NVIDIA and Intel. The current market cap for the stock stands at $112.05 billion. The outlook for AMD is bright as it brings its own set of GPUs and processors that consistently beat the other top rivals. There is also a deal between Advanced Micro Devices and Samsung to supply a graphics chip that matches with its Exynos processor, which is said to beat Apple's chips. Over the past few years, the price of AMD has been in an uptrend.
Heico Cooperation HEI
The aerospace company HEI focuses on developing jet engines and aircraft components. The pandemic has taken a toll on the stock; nonetheless, it quickly turned around to report a non-flight growth of 4%. The current market cap of HEI is $16.51 billion. HEI is a good buy as it has many benefits and good news, including the recovery of multi-year and FSG, limited drawdown due to space and defense, and offering FAA-approved parts at a low price in contrast with OEMs.
The semiconductor design company AMBA has a market cap of $4.12 billion. Some investors may consider it too late to buy the stock since its uptrend from the Q3 earnings. There is still growth potential as the firm continues to feature its chips in top products. It has also received an overall buy rating from analysts. Over the past three years, the price has been revolving around the average $45 mark, which it then broke to record new highs for the year 2021.
Novavax is one of the leading vaccine developers who has received appreciation from top personalities such as Bill Gates. The market cap for the stock is at $19.16 billion. The company is said to apply for approval for its Covid-19 vaccine, which will set shares for a further uptrend after a recent addition of 190% this year. Analysts forecast a $24.16 in per-share earning, which is an overall increase from the previous $16.90. Considering the excellent outlook, the value of NVAX has increased immensely over the past year.
Criteo is one of the world’s best ad retargeting companies with a $1.74 billion market cap. During the past couple of years, the stock value is on the downside as more top browsers phase-out cookies, which is one of the primary tools used by CRTO for analyzing consumer behavior. The company has adapted to the change and increasing its sales on its other segments that have increased significantly. With a share value of around $20, it is not as risky to hold the stock for a bright future.
AAN specializes in leasing and retailing consumer products such as computers, furniture, and electronics. It has a current market cap of $679 million. As the pandemic situation improves, Aarons is said to make significant gains. It is growing its current revenue at a rate of 20%. The price had seen a dump during the pandemic; however, it recovered to its early state and is ready for a big jump.
Qualcomm is one of the leading chip manufacturers for mobile and other related devices. The market cap is at $165.29 billion. The company breaks boundaries by making new, more efficient 5 nm processors and beating other top companies such as Samsung in the same niche. With the new 5G infrastructure already in the market, QCOM is sure to make a fair amount of profits. The tech stock has nearly doubled its value over the past year.
Acuity Brands AYI
Headquartered in Atlanta, Acuity is a firm that specializes in lighting and building management. It has a market cap of $4.42 billion. The profits are expected to grow around 13% over the next couple of years, which is good news. A higher cash flow will result in pushing this stock closer to its high intrinsic value. AYI is a mid-cap stock that also sees a lot of coverage from investors and is priced reasonably.
Grand Canyon Education LOPE
LOPE has a market cap of $4.7 billion. The company provides educational services and lost around 40% of its share value at the start of Covid-19 in march 2020. The online course helped out Grand Canyon as it gained 7.5% of students in Q3. At the earnings call, the CEO gave a positive outlook for the next decade by indicating that it is developing three more platforms. The company will post its quarterly earnings on Wednesday 10th February so keep an eye out for that.
IBM is a leading computer manufacturer and has a market cap of $108.89 billion. The company has been slow in adapting to cloud-based technologies, which may be one reason its stock has underperformed since 2013. However, the recent deal signings and improvements in technology are sure to set the right direction. The huge sell-off during the recent months is a good buy opportunity for investors.
Expert tip on investing in best undervalued stocks
It is necessary to keep your risk management in check at all times during trading. A poor ability to control drawdowns will surely give you a seat among the losers. Do not risk more than 5% of your total market capital in a single trade. Live to fight another day is a famous motto among investors.
Why trade the best undervalued stocks?
The best undervalued stocks provide good gains as soon as the price soars up to its intrinsic value. As the shares are lower than their intrinsic estimate, it is easy to buy enough shares and still keep your risk on the minimal side. Keeping an eye out for possible forecasts by analysts and earnings will give you an edge of a securities’ future worth. This can increase your probability and allow you to exit a position at the right price. Be cautious about cashing out too early due to fake news, as you’ll leave profits on the table. Ride out the whole trend till the end.
Frequently Asked Questions
The forex market focuses on trading currencies, while the shares market is for trading stocks.
Yes, the best undervalued stocks are profitable.
AMD has the potential to be the most profitable.
AMD is the safest to trade.
Yes, undervalued stocks are a good investment for beginners.
No, they are traded when the respective exchanges are open.