Despite high inflation, war, interest rate hikes and possible recession, the market remains highly valued. Currently, the S&P 500 still has an average P/E ratio of close to 25. This figure is well above the long-term average P/E ratio of the S&P 500. However, not all names in the S&P 500 trade at these above-average ratings. Alphastocks has found a handful of quality names to take a closer look at here.
Like it or not, there’s no denying that shares of the company formerly known as Facebook are extremely cheap right now. Meta Platforms currently has a P/E ratio of 13.4, which is incredibly cheap for a large-cap technology company. For reference, Alphabet has a P/E of 21, Apple a P/E of 27, and Amazon a P/E of 45. You may not know much yet, but right now the P/E of Meta Platforms E-ratio is lower than McDonald’s and even Coca-Cola.
The average price-earnings ratio among Nasdaq-traded tech stocks is 25. This shows how much FB shares have fallen this year on concerns about slowing online ad sales and the company’s focus in developing its virtual reality technology known worldwide as the “metaverse”.
While this is bad for current shareholders, the sharp drop offers an attractive entry point for new investors. And analysts seem to agree that Meta Platforms is seriously undervalued at current levels. The average analyst price target for Meta Platforms is $320, suggesting an increase of nearly 50% over the next 12 months.
Chipmaker Intel has been in trouble lately. The stock has fallen sharply after the last seven quarterly earnings reports. But with a new leader at the helm, some investors are wondering if now is the time to buy Intel. Intel stock looks very cheap right now. With a P/E ratio of just 9.6, Intel looks incredibly cheap. This is especially the case if you compare Intel with competitors like AMD or Nvidia. AMD is currently trading at a price-to-earnings ratio of no less than 34 and Nvidia even at 51.
Intel has seen a slowdown in revenue growth for its data center and client computing products in recent years. This can be attributed to increased competition and a general shortage of raw materials.
However, the company has several new products in the pipeline and is spending many tens of billions building new plants and research and development (R&D). For a long-term investor with faith in Intel’s management, the company can do more research and come to its own conclusion as to whether Intel might be an interesting investment.
You probably heard the news a few weeks ago. Warren Buffet, generally known as the greatest investor of all time, has taken a position in the HP company. HP officially no longer exists, as of yesterday HP has officially split into two separate companies, HP Inc and Hewlett-Packard Enterprise. HP Inc is the company that operates in the PC market with desktops, notebooks and printers, while Hewlett-Packard Enterprise will provide all business products and services.
So what did Warren Buffett see at HP Inc? First of all, it is an extremely cheap stock when you look at the P/E ratio. HP is trading at just seven times earnings, suggesting the market believes earnings will fall or stagnate. Buffett’s value-oriented investing style sees opportunities to make money on a stock trading below its calculated net asset value. Also, HP Inc is a stable company that pays dividends and also buys back quite a few shares. In this way, you can benefit from an investment in HP Inc in three ways (price appreciation, share repurchase and dividends).
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