These stocks could have serious upside potential.
There’s the old Wall Street saying that investors should buy low and sell high. That’s the premise behind these seven stock picks, which experts say are undervalued. Their shares could rise in value if certain conditions are met. Of course, there are no guarantees with investments, but out of the wide universe of equities to choose from, these have at least been vetted by experts who spend more of their time looking at stocks than the average Joe or Jill. You’ll find technology, energy and consumer stocks here, and you may want to snap them up while they’re seen as bargains. Here are the best undervalued stocks to buy now.
Micron Technology Inc. (ticker: MU)
Uri Gruenbaum, CEO of retail financial data platform TipRanks, says he’s seen some promising stocks lose 10% to 50% of their value amid the broad-based market sell-off. That’s especially true for tech stocks, as some of them can be more speculative plays that investors aren’t super bullish on during times of risk-off sentiment. “Most tech stocks have come down considerably in price since late November 2021, and in the frame of last year these stocks are all bargains,” Gruenbaum says. So far this year, semiconductor company Micron has lost about 16%, as of its March 21 close at $78.35. But the analyst consensus rating provided by TipRanks is a “strong buy,” with an average 12-month price target of $120.20 on March 21.
CrowdStrike Holdings Inc. (CRWD)
One subset of technology stocks is looking particularly promising. That’s the cybersecurity industry, as people and businesses are expected to spend more to protect their data. “Regarding cybersecurity, this year was already anticipated by some to be big on spending,” Gruenbaum says. “This has been boosted due to Russian state-sponsored cyber threats and cyberwarfare.” Over the past six months, CrowdStrike’s stock was down more than 19% as of its close on March 21 at $204.13. But the TipRanks analyst consensus is a “strong buy,” with an average 12-month price target of $269.68.
SentinelOne Inc. (S)
Another cybersecurity stock that’s getting attention is SentinelOne. It’s down more than 23% year to date, closing at $38.48 on March 21. But with the positive outlook for the cybersecurity industry, the analyst consensus provided by TipRanks is a “strong buy.” The average 12-month price target is $46.56. “Cybersecurity is essentially a never-ending industry, constantly expanding along with tech and digitization in general,” Gruenbaum says. But he does offer a caveat to the short-term forecast. “If, however, stocks continue to decline with uncertainty and fear, the more speculative and risk-on names (which are usually tech) will continue to decline more than the rest of the broader market,” he says.
Cloudflare Inc. (NET)
Cloudflare provides cloud-based services to secure websites and offers products for performance and reliability, video streaming and delivery, and advanced security and domain registration, among other things. This cybersecurity company’s shares are off about 20% so far in 2022 through its March 21 close of $104.45. Meanwhile, the analyst consensus provided by TipRanks is a “moderate buy,” with a 12-month average price target of $151.47. Last week brought news that Cloudflare and Crowdstrike are expanding their partnership so that joint customers can enable their employees to have cybersecurity protection from wherever they are working.
Valero Energy Corp. (VLO)
The energy sector has been performing strongly as the global economy bounces back from the pandemic, but supply hasn’t kept pace. Russia’s invasion of Ukraine has driven oil and natural gas prices even higher. “About 10% of the world’s oil comes from the aggressor nation, and the sanctions levied against its government and energy sector do not look like they will be rolled back anytime soon,” Gruenbaum says. One beneficiary is Valero, a refining and marketing company that manufactures and markets transportation fuels and other energy products. So far this year, its shares are up nearly 27% as of its March 21 close of $94.26, but that doesn’t mean it might not still be a bargain. The analyst consensus provided by TipRanks is a “strong buy,” with an average 12-month price target of $98.
Williams-Sonoma Inc. (WSM)
Inflation isn’t just affecting household budgets. It’s also raising input costs for companies. Those that are more able to pass higher costs on to customers stand to do better than others. “In an inflationary environment, you want to look at companies with pricing power, and WSM seems to have it,” says Tim Bain, chief investment officer at Spark Asset Management Group. The Williams-Sonoma, Pottery Barn and West Elm brands the company owns tend to cater to more affluent shoppers, who may have more of a cushion when it comes to absorbing higher costs for items. The analyst rating consensus provided by TipRanks is a “moderate buy,” with an average 12-month price target of $185.20. WSM closed at $158.63 on March 21, down more than 13% over the previous six months.
Crocs Inc. (CROX)
Shares of the comfy-shoe maker have dropped more than 36% year to date through its March 21 close of $81.45, and now could be a decent entry point. The company had a generally solid fourth quarter, but its outlook for 2022 revenue growth disappointed, and it has been facing supply chain issues. Still, the company’s sales are growing, and it is aiming for $6 billion in sales by 2026. It posted record revenues of $2.3 billion in 2021. In February, Crocs completed the acquisition of casual-footwear brand Hey Dude. That purchase should help drive revenue growth, Bain says. He also likes that insiders have recently been buying shares. “While fashion can be fickle, I think Crocs has gone mainstream and can follow through on its optimistic growth plans,” he says. The analyst rating consensus provided by TipRanks is a “moderate buy,” with an average 12-month price target of $165.63.
Top undervalued stocks to buy today:
— Micron Technology Inc. (MU)
— CrowdStrike Holdings Inc. (CRWD)
— SentinelOne Inc. (S)
— Cloudflare Inc. (NET)
— Valero Energy Corp. (VLO)
— Williams-Sonoma Inc. (WSM)
— Crocs Inc. (CROX)
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Update 03/22/22: This story was published at an earlier date and has been updated with new information.