S&P 500   4,692.41 (+0.12%)
DOW   35,691.29 (-0.08%)
QQQ   398.69 (+0.22%)
AAPL   175.61 (+2.59%)
MSFT   332.73 (-0.65%)
FB   330.84 (+2.49%)
GOOGL   2,948.52 (+0.11%)
AMZN   3,528.45 (+0.15%)
TSLA   1,060.43 (+0.83%)
NVDA   317.12 (-2.20%)
BABA   125.74 (+0.16%)
NIO   34.97 (+5.59%)
CGC   11.01 (+3.48%)
AMD   144.42 (-0.30%)
GE   98.34 (+0.81%)
MU   85.64 (-0.22%)
T   23.21 (+0.56%)
F   19.83 (-0.65%)
DIS   153.20 (+1.58%)
PFE   51.49 (-0.44%)
AMC   32.64 (+5.15%)
ACB   6.61 (+3.61%)
BA   210.41 (+0.76%)
S&P 500   4,692.41 (+0.12%)
DOW   35,691.29 (-0.08%)
QQQ   398.69 (+0.22%)
AAPL   175.61 (+2.59%)
MSFT   332.73 (-0.65%)
FB   330.84 (+2.49%)
GOOGL   2,948.52 (+0.11%)
AMZN   3,528.45 (+0.15%)
TSLA   1,060.43 (+0.83%)
NVDA   317.12 (-2.20%)
BABA   125.74 (+0.16%)
NIO   34.97 (+5.59%)
CGC   11.01 (+3.48%)
AMD   144.42 (-0.30%)
GE   98.34 (+0.81%)
MU   85.64 (-0.22%)
T   23.21 (+0.56%)
F   19.83 (-0.65%)
DIS   153.20 (+1.58%)
PFE   51.49 (-0.44%)
AMC   32.64 (+5.15%)
ACB   6.61 (+3.61%)
BA   210.41 (+0.76%)
S&P 500   4,692.41 (+0.12%)
DOW   35,691.29 (-0.08%)
QQQ   398.69 (+0.22%)
AAPL   175.61 (+2.59%)
MSFT   332.73 (-0.65%)
FB   330.84 (+2.49%)
GOOGL   2,948.52 (+0.11%)
AMZN   3,528.45 (+0.15%)
TSLA   1,060.43 (+0.83%)
NVDA   317.12 (-2.20%)
BABA   125.74 (+0.16%)
NIO   34.97 (+5.59%)
CGC   11.01 (+3.48%)
AMD   144.42 (-0.30%)
GE   98.34 (+0.81%)
MU   85.64 (-0.22%)
T   23.21 (+0.56%)
F   19.83 (-0.65%)
DIS   153.20 (+1.58%)
PFE   51.49 (-0.44%)
AMC   32.64 (+5.15%)
ACB   6.61 (+3.61%)
BA   210.41 (+0.76%)
S&P 500   4,692.41 (+0.12%)
DOW   35,691.29 (-0.08%)
QQQ   398.69 (+0.22%)
AAPL   175.61 (+2.59%)
MSFT   332.73 (-0.65%)
FB   330.84 (+2.49%)
GOOGL   2,948.52 (+0.11%)
AMZN   3,528.45 (+0.15%)
TSLA   1,060.43 (+0.83%)
NVDA   317.12 (-2.20%)
BABA   125.74 (+0.16%)
NIO   34.97 (+5.59%)
CGC   11.01 (+3.48%)
AMD   144.42 (-0.30%)
GE   98.34 (+0.81%)
MU   85.64 (-0.22%)
T   23.21 (+0.56%)
F   19.83 (-0.65%)
DIS   153.20 (+1.58%)
PFE   51.49 (-0.44%)
AMC   32.64 (+5.15%)
ACB   6.61 (+3.61%)
BA   210.41 (+0.76%)

Stocks on Sale in 2021

Below you will find a list of companies that are trading at the largest percentage discount compared to their fifty-two-week highs. These stocks are considered by the market to be on sale due to their recent price depreciation. More about undervalued stocks.

MarketRank evaluates a company based on community opinion, dividend strength, institutional and insider ownership, earnings and valuation, and analysts forecasts.
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Media sentiment refers to the percentage of positive news stories versus negative news stories a company has received in the past week.
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Analyst consensus is the average investment recommendation among Wall Street research analysts.
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Analyst ConsensusUpgrade to All Access to use the All Ratings Filter
CompanyCurrent Price52-Week HighDiscount from 52-Week HighConsensus RatingPrice TargetIndicator(s)
GOTU
Gaotu Techedu
$2.44
+11.9%
$149.0598.4%Sell$8.16Upcoming Earnings
YQ
17 Education & Technology Group
$1.67
+5.7%
$95.7298.3%Sell$16.60
AEI
Alset EHome International
$0.62
+0.3%
$29.4997.9%N/A$0.00
EJH
E-Home Household Service
$2.03
+5.2%
$80.9397.5%N/A$0.00Gap Up
CPOP
Pop Culture Group
$2.08
+16.2%
$78.0097.3%N/A$0.00Gap Up
SNTG
Sentage
$1.52
+2.7%
$52.0097.1%N/A$0.00Positive News
UTME
United Time Technology
$3.21
+1.3%
$107.3397.0%N/A$0.00Gap Down
JZXN
Jiuzi
$1.78
-1.1%
$49.0196.4%N/A$0.00News Coverage
Positive News
Gap Down
ORPH
Orphazyme A/S
$3.04
+2.4%
$77.7796.1%Sell$5.00News Coverage
NEW
Puxin
$0.36
+5.8%
$9.1796.1%N/A$0.00Upcoming Earnings
Gap Up
COE
China Online Education Group
$1.25
+3.3%
$30.0895.8%Buy$9.00Upcoming Earnings
SCPS
Scopus BioPharma
$2.10
-2.8%
$47.8695.6%Hold$20.00News Coverage
Positive News
Gap Up
CMMB
Chemomab Therapeutics
$8.21
+4.1%
$168.8095.1%Buy$43.50Analyst Report
Gap Up
DUO
Fangdd Network Group
$0.59
+1.2%
$10.4094.3%Sell$0.00
RAAS
Cloopen Group
$3.40
-2.9%
$59.0094.2%Buy$21.60Options Volume
Gap Down
TAL
TAL Education Group
$5.37
+14.0%
$90.9694.1%Hold$48.58Stock Split
ZME
Zhangmen Education
$1.22
+7.0%
$20.5294.1%Buy$15.00Lockup Expiration
Gap Up
ZME
Zhangmen Education
$1.22
+7.0%
$20.5294.1%Buy$15.00Lockup Expiration
Gap Up
SGTX
Sigilon Therapeutics
$3.27
+2.5%
$54.3294.0%Buy$22.70
FWBI
First Wave BioPharma
$1.60
+2.6%
$26.3093.9%Hold$8.00Analyst Downgrade
Gap Down
UGRO
urban-gro
$10.00
-0.2%
$162.0093.8%N/A$0.00Gap Down
OTRK
Ontrak
$6.20
-1.4%
$99.8993.8%Hold$22.00News Coverage
GRAY
Graybug Vision
$2.31
+4.1%
$35.1893.4%Hold$5.75
ALZN
Alzamend Neuro
$2.23
+4.2%
$33.5593.4%Buy$11.50Lockup Expiration
LAIX
LAIX
$0.79
+5.3%
$11.6593.2%N/A$0.00Upcoming Earnings
METX
Meten EdtechX Education Group
$0.31
+4.4%
$4.2792.7%Buy$3.00Gap Up
EAR
Eargo
$5.73
+4.8%
$76.7592.5%Hold$10.50Upcoming Earnings
Gap Up
SOS
SOS
$1.20
+4.8%
$15.8892.5%N/A$0.00
NXTD
Nxt-ID
$2.62
+6.9%
$34.4092.4%N/A$0.00Gap Up
EVFM
Evofem Biosciences
$0.43
+3.7%
$5.5392.3%Hold$1.50
SONM
Sonim Technologies
$1.32
-1.1%
$17.0092.3%Buy$0.00Gap Down
AACG
ATA Creativity Global
$1.54
+0.7%
$19.7592.2%N/A$0.00
REDU
RISE Education Cayman
$0.55
-1.5%
$7.0092.2%Hold$2.90Upcoming Earnings
Gap Down
HYMC
Hycroft Mining
$0.70
-4.1%
$8.8492.1%Hold$0.00Gap Up
QTT
Qutoutiao
$0.45
+2.2%
$5.6492.0%N/A$0.00Upcoming Earnings
Stock Split
News Coverage
Gap Down
NRXP
NRx Pharmaceuticals
$6.24
-2.7%
$76.9991.9%N/A$0.00
CTK
CooTek (Cayman)
$0.59
+9.7%
$7.2091.7%N/A$0.00News Coverage
Gap Up
BLCT
BlueCity
$1.69
-0.6%
$20.4691.7%Buy$13.50News Coverage
Gap Down
YI
111
$3.83
+6.4%
$45.8891.7%N/A$0.00
ENVB
Enveric Biosciences
$1.28
+2.4%
$15.0491.5%Buy$6.50Upcoming Earnings
VECT
VectivBio
$3.25
+6.6%
$37.7091.4%Buy$23.67News Coverage
Gap Up
Trading Halted
VYNE
VYNE Therapeutics
$1.15
+0.9%
$13.2091.3%Buy$6.50Analyst Report
Options Volume
Gap Down
MIC
Macquarie Infrastructure
$3.58
-0.3%
$41.0091.3%Hold$45.50
YSG
Yatsen
$2.27
+2.3%
$25.4791.1%Hold$20.30
AVIR
Atea Pharmaceuticals
$8.68
+5.2%
$94.1790.8%Hold$27.33
STG
Sunlands Technology Group
$3.44
+3.9%
$36.8890.7%N/A$0.00Positive News
Gap Up
NVOS
Novo Integrated Sciences
$1.42
-3.4%
$14.9890.5%N/A$0.00Gap Down
RFL
Rafael
$6.33
+5.1%
$66.4490.5%N/A$0.00
TISI
Team
$1.32
-1.5%
$13.8490.5%Hold$0.00
SPRB
Spruce Biosciences
$2.72
+6.7%
$28.4990.5%Buy$10.33Analyst Upgrade

Executive Summary

One way for investors to find quality investments that fit their risk tolerance, time frame and investment objectives is to look for stocks that are selling at a price that is below their underlying value. This is one of the principles of value investing. This particular strategy of finding undervalued stocks dates back to 1949. That was the year Benjamin Graham published The Intelligent Investor.

Value investing is an investment strategy that involves picking stocks of companies that for one reason or another are trading at or below its intrinsic value (otherwise called its book value). Value investors use a variety of tools to actively look for stocks that may be being disregarded. One of the principals of value investing is that institutional investors and analysts overreact to the news. When this happens, it’s possible for a stock to get decoupled from its fundamentals. When this causes a stock’s price to drop lower than the company’s book value, a company can become undervalued.

The good news for investors is that there are a variety of online tools such as stock screeners that make it easy to find undervalued stocks. But investors can also look beyond the numbers to see if a company is undervalued. For example, a company that has a proprietary formula or manufacturing process may have a unique selling proposition that allows it to offer consumers lower prices.

Value investing tends to move in and out of fashion along with the economy. When the economy is going well, many investors tend to look for growth stocks. But when the economy shows weakness, value investing becomes the goal of many investors.

Introduction

One of the fundamental mistakes investors make is buying stocks that are grabbing the headlines. The problem with this approach is that when investors are all flocking to the “hot stock”, it’s almost impossible for that stock to be undervalued. This means that no matter how much you invest in these companies it will be hard for you to outperform the market.

A different, and some might say better approach, is to look at stocks of companies that are undervalued. They are fundamentally healthy companies, but for whatever reason they are selling for a price that is less than what they are worth.

This approach is known as value investing. One of the pioneers and advocates of this strategy was Benjamin Graham who first posed an investing strategy for finding undervalued stocks in his book, The Intelligent Investor.

In this article, we’ll help investors understand why a stock would be trading below its real value, how investors can use publicly available data from companies to identify undervalued stocks. We’ll also address why the internet is making it easier than ever for investors to find undervalued stocks and how investors can go beyond the numbers to find stocks that are undervalued.

Why would a stock sell below its real value?

The conventional wisdom is that when a company’s stock is falling, there is a distinct reason to stay away. But that may not be the case at all. A key principle of value investing is understanding why the market price of a stock is not always accurate. There are several reasons this may occur:

  • A company’s earnings report misses expectations. Corporate earnings reports are one of the most closely watched metrics for investors. Publicly traded companies are required to present investors with detailed financial statements that provide a snapshot of the quarter just completed and guidance for future quarters. If a company delivers results that are below the expectations of the analysts that cover the company (e.g. have lower revenue and/or earnings per share than expected) shares of the company’s stock may drop lower than the company’s fundamentals suggest should be the case.
  • The broader market crashes or corrects. When there is a broad sell-off based on a significant event (e.g. the coronavirus pandemic) it doesn’t discriminate which stocks see their share prices fall. This can be an exceptional time to find stocks of quality companies at bargain prices.
  • A specific company is hit with bad news. From a product recall to a food safety issue, a company or sector can get hit with bad headlines. However, this can lead to a disproportionate response that can take a company’s shares further down than is warranted.
  • Normal fluctuations in the business cycle. Different sectors of the economy perform better at different times of an economic cycle. When a sector is out of favor, it can be a good time to look at finding a quality company selling at a price below its underlying value.

How can investors identify undervalued stocks?

Here are six common criteria that value investors will use to identify undervalued stocks.

  1. Stocks that have a low price/earnings ratio – A stock’s price/earnings ratio indicates how much investors are willing to pay for a dollar of earnings. The price/earnings ratio is calculated by dividing a stock’s current price by its annual earnings. A lower P/E means a stock is technically “cheaper”. It is important to interpret an individual stock’s P/E ratio in context with other companies in its sector.
  2. Lagging relative price performance – Just as you can compare P/E ratios between companies in a sector, you can also compare share price. If a particular company has a share price that is lower than its peers, it can be an indication of a stock that is undervalued.
  3. Stocks that have a low price/earnings to growth ratio – A company’s price-to-earnings to growth ratio (also referred to as its PEG ratio) is found by dividing a stock’s P/E ratio by its projected earnings growth rate over a certain time period. The typical time frame is five years. A ratio of less than 1 may indicate that investors are giving more weight to past performance than to future growth opportunities. The PEG ratio can also help investors identify companies that have a relatively high P/E ratio but support that with rapidly growing earnings. This says that the company is generating both sales and profit.
  4. Stocks that are offering a high dividend yield – A high dividend yield is one of the more deceptive ways to look at a stock. As a company’s stock price goes down its dividend yield goes up. To be fair, a company that has a high dividend yield may have that because it is in financial trouble, but often it is simply a victim of temporary circumstances. If the fundamentals of the company look good, and it does not appear they will have trouble paying its dividend, then buying these stocks can provide a high dividend in the short term, and the potential for nice growth in the longer term.
  5. Stocks that have a low market-to-book ratio – A company’s market value is its total market capitalization (market cap). A company’s book value is the net asset value (NAV) of a company. To calculate book value, subtract a company’s liabilities from its assets. Then divide that result by the number of common shares outstanding. Investors that are using this metric should pay attention to is the real value of a company’s tangible assets and its intangible assets.
  6. Free cash flow – Free cash flow is the cash that a company generates after it accounts for cash outflows to support operations and maintain its capital assets. It is a measure of profitability. If a company is reporting lower earnings but a high free cash flow it can mean the company is undervalued. However, it can also be deceptive because it may mean a company is not making the best use of the cash they have on hand.

What are other metrics investors should look at to determine the value of a company?

Here are a few other metrics you can use to evaluate the value of a stock.

  • Price-to-book (P/B) ratio – This is a stock’s price divided by its equity per share. A book value of less than one suggests that a stock is trading for less than the value of the underlying company’s assets. Value investors use P/B multiples to find stocks with a margin of safety.
  • Return on equity (ROE) – This is a company’s annualized net income as a percentage of shareholder’s equity. ROE measures how efficiently a company uses its invested capital to generate profits.
  • Debt-to-equity ratio – This is a company’s total debt divided by its shareholders’ equity.
  • Current ratio – This is a ratio that expresses how easily a company can pay its short-term obligations. Current ratio is calculated by dividing a company’s current assets by its current liabilities.

Use a stock screener to help you crunch the numbers

One of the many reasons that the internet has made this a golden age for investors is that investors have more access to information than they’ve ever had. The Securities & Exchange Commission (SEC) requires companies to file their financial information prior to their earnings reports. These basic documents such as a company’s income statement, balance sheet, and cash flow statements are available on a company’s web site.

There are also a variety of stock screening tools that automatically perform these calculations such as the ones listed above. Many of these stock screeners allow you to sort companies by specific metrics so investors can easily find companies that meet the criteria that they determine.

What are other ways investors can look for undervalued stocks?

Before you start to look at the financials of specific companies, you have to narrow down your target list. Here are some guidelines to follow.

Investors should look at companies they understand – This would seem fairly obvious, but many novice investors make the mistake of investing in companies that they don’t understand. For example, in the dot-com boom many investors were buying shares of companies simply because they had a .com in their name. But the internet in general was a new phenomenon and many investors did not realize that many of these businesses had flawed, if any, business model. Sticking with businesses that they know can help investors understand what the company’s numbers actually mean.

Look beyond a company’s numbers when necessary – You sometimes hear about a company having a “moat”. This simply means that its business is protected, to a certain extent, from competition. A good example of this is a company like Walmart which based on its size and efficiency can simply keep prices lower than many other retailers. Companies with a moat tend to perform well in tough economic times because customers will seek out their business for lower prices.

This also applies to companies that provide the goods and services that are stocked inside a Walmart. You hear the words “defensive stocks”. These are companies that make products that consumers need regardless of the state of the economy.

Conclusion

Finding undervalued stocks is not an exact science. Value investing in general frequently goes out of fashion when the economy is good. When the market is rising, it’s easy for investors to lose sight of their investment objectives and even their risk tolerance as they try to chase after the highest flying stocks.

Unfortunately, as we’ve seen many times, when the market goes down there is a flight to safety and quality. At times like these, investors take a closer look at the merits of value investing. One of the most difficult things for investors to see is that there are well-performing stocks in any economy. One of the keys for investors is not only staying engaged in the market, but also to look for undervalued stocks that can help their portfolio regardless of what direction the market is moving.  

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