Three Investment Opportunities Currently Treading at Their Yearly Low Price Points, Worth Considering Immediately
There's a plethora of growth stocks selling at ludicrous premiums presently. One of the reasons behind this is the obsession with all things artificial intelligence (AI)-related, which has inflated some stock prices exponentially. However, while the limelight is on AI-related stocks, there are numerous growth stocks that are being overlooked.
If you're on the lookout for bargains and have some patience, these three undervalued stocks you should consider stacking up on are AstraZeneca (AZN -0.54%), United Parcel Service (UPS -0.17%), and Dollar Tree (DLTR -1.04%). Each of these stocks is trading close to their 52-week lows and has the potential to be a goldmine in the future.
AstraZeneca
AstraZeneca's shares ended the previous week barely a dollar away from its 52-week low of $60.47. The stock has been stumbling despite a commendable quarterly report released on Nov. 12. In the first nine months of the year, the company's sales had increased by 19% (at constant exchange rates) to $39.2 billion, while its per-share earnings had surged by 21% when accounting for foreign exchange.
The bad news for investors seems to be an investigation in China that has targeted the company's senior executives and allegations of fraud. China is a significant market for AstraZeneca, and, if not for these concerns, the healthcare stock would likely be thriving more, as its results have otherwise been impressive.
Although the investigation is a problematic one, investors may be overreacting at this stage. AstraZeneca remains a stellar growth stock to invest in, and at less than 14 times next year's estimated earnings (based on analyst predictions), it makes for an excellent stock to buy and hold.
United Parcel Service
Another long-term growth stock that's currently out of favor among investors is United Parcel Service, better known as UPS. Since the beginning of the year, the stock price has plummeted by 14% going into this week. It has been rising in recent weeks, but it's still within about 10% of its lows for the year.
The company had a tough year in 2023, with sales plummeting by more than 9% to just under $91 billion. However, the business has prospered lately, with UPS reporting almost 6% growth year over year for the most recent quarter, which ended on Sept. 30. As we approach the bustling holiday shopping season, UPS could be in line for better results if it can sustain this momentum into the current quarter.
For long-term investors, this remains an excellent stock to buy, regardless of what happens in the short term. The logistics industry has countless growth opportunities due to the escalating demand for e-commerce. UPS stock trades at a forward price-to-earnings (P/E) multiple of 15, making it another affordably priced investment to incorporate into your portfolio today.
Dollar Tree
Discount retailer Dollar Tree has lost more than half of its value this year. It's around its 52-week low, and it's a heavily discounted stock, trading at a forward P/E of just over 10. Dollar Tree's same-store sales growth has been unimpressive, coming in at just 1.3% last quarter (for the period ended Aug. 3). The company claims it's grappling with challenging economic conditions.
Investors are anxious that things may worsen, as President-elect Donald Trump has threatened to impose aggressive tariffs on goods imported from China. Dollar Tree, which sources many of its items from China, could feel the impact sharply.
However, as Dollar Tree introduces more high-priced items in its stores, it may be better equipped to handle an increase in expenses than it was in the past. Although it's not a favorable situation for the business, it can still be a beneficial contrarian investment, given how cheap Dollar Tree stock is today. The last time it traded around its current levels was in 2017.
Between expanding its store count and offering more expensive items, there could still be significant growth ahead for Dollar Tree in the future. The near term may be tough, but investors shouldn't dismiss the stock over the long haul, especially as economic conditions improve.
Despite the current market obsession with AI-related stocks, there are still undervalued growth stocks worth considering for investments. For instance, AstraZeneca, with its impressive sales growth and earnings surge, is a stellar growth stock that is currently trading at a bargain price.
Investors looking for a long-term growth opportunity in the logistics industry may find United Parcel Service (UPS) to be an affordable choice. With a forward price-to-earnings (P/E) multiple of 15, UPS stock offers a promising investment prospect, especially considering the escalating demand for e-commerce.
