HomeMost Popular Uncovering Potential: 3 Stocks Worth a Look

Uncovering Potential: 3 Stocks Worth a Look

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Let’s delve into three individual stocks that have been generating a lot of buzz lately. Today, we’ll explore the reasons behind their intriguing valuations.

Rediscovering Hidden Gems

PayPal Holdings (PYPL)

PayPal Holdings, a leading Fintech company, soared to an all-time high of $308.53 during the pandemic but has since plummeted by 80% to its current price of $62. Despite this drop, the company continues to hold a market cap of $67 billion. While the stock experienced a 10% decline over the past year, it surged by more than 10% in the last month.

Founded by a group including Elon Musk, PayPal became popular after its acquisition by eBay in 2002. It has since evolved into one of the most trusted online payment platforms, encompassing businesses and consumers. Additionally, the company owns the ever-popular Venmo, which is currently being strategized for monetization. Although an early adopter of online payment processing, PayPal now faces stiff competition, notably from Apple (AAPL) through its Apple Pay service.

Despite the industry competition, PayPal’s revenue has continued to rise over the years, and analysts anticipate this trend to persist. Expected earnings per share (EPS) growth of 11% in 2024 and 13% in 2025 further bolster the company’s prospect. With a forecasted 2024 EPS of $5.53, PYPL’s earnings multiple of just 11.2x and a PEG ratio of 1.0 indicate its undervaluation, making PayPal a buy. Analysts also share this optimism, rating the stock as a buy with a 12-month price target of $74 per share, suggesting approximately 23% upside from current levels.

Alphabet Inc. (GOOGL)

Another stock drawing attention is Alphabet Inc., a member of the esteemed β€œMagnificent 7” and a rare value play within that cohort. Despite its colossal $1.7 trillion market cap, and a robust 55% surge in the last 12 months, Alphabet is considered undervalued. The company faced early-year turbulence amid concerns about a slowdown in digital advertising, a significant business segment given its dominance through Google Search and YouTube. However, the company’s diversification, including a substantial footprint in the Cloud segment and endeavors in Artificial intelligence, exemplify its resilience. Operating efficiently, Alphabet exhibited a remarkable 11% top-line revenue growth in its recent quarter, accompanied by operating margins of 28% – 300 basis points higher than the previous year. Analysts foresee sustained double-digit revenue and EPS growth over the next few years, making GOOGL an attractive prospect. With shares of GOOGL trading at a forward P/E ratio of 20.9x, below their 10-year average of 25x, analysts also project a 12-month price target of $155, indicating a nearly 10% upside from current levels. Therefore, I deem shares of GOOGL a buy.

NextEra Energy (NEE)

NextEra Energy, a prominent utility company, incorporates a regulated portion and segments dedicated to resources. The regulated utility division is touted as β€œAmerica’s largest utility company,” boasting impressive scale. Providing exposure to the renewable resources growth narrative, NextEra Energy maintains a market cap of $122 billion. Despite a 30% slump over the last 12 months – a reflection of the utility sector’s struggles recently – NextEra Energy is positioned as a compelling opportunity for investors.

This trio of stocks represent compelling opportunities for investors, offering undervalued potential with promising outlooks for the future.

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