Top Picks for Budget-Friendly Shares in Today's Market
Undervalued Stocks to Buy Now: A Focus on Mid-Caps and Small-Caps
In the current market landscape, mid-cap and small-cap stocks are proving to be attractive investments. According to Kiplinger Personal Finance, these stocks remain nominally cheap and historically undervalued compared to large-cap stocks, despite an overall market rally pushing the S&P 500's forward P/E to just above 22.
Here are five undervalued stocks from various sectors that are worth considering:
- Chart Industries (GTLS)
This industrial firm specialising in equipment for the liquid gas supply chain trades below the industrial sector's 24 forward P/E and at an attractive 0.10 PEG. Analyst Dan Kutz of Morgan Stanley Research has designated Chart Industries as his top pick, with expectations of a 41% growth in the bottom line this year, followed by another 23% in 2026.
- CarGurus (CARG)
The online vehicle marketplace is cheaper than the communication services sector with a forward P/E of 13.4 and a PEG of 0.68. Oppenheimer analyst Jed Kelly rates CarGurus shares at Outperform and believes the company's push into wholesaling is "potentially transformational."
- Opera Limited (OPRA)
With a market value of $1.5 billion, this information technology stock has a forward P/E of 11.3, PEG of 0.71, and a dividend yield of 4.7%. The analyst community considers Opera to be one of the best undervalued stocks to buy due to its growth prospects. B. Riley Securities analyst Naved Khan rates Opera as a Buy and finds the company's focus on driving growth in its Western user base positively. On average, analysts predict Opera will generate 20% long-term annual earnings growth.
- Citizens Financial Group (CFG)
Citizens Financial Group, a large regional bank, is a truly undervalued stock with a forward P/E of 9.9, PEG of 0.47, and a dividend yield of 3.4%. Keefe, Bruyette & Woods analyst Christopher McGratty rates Citizens Financial Group at Outperform. The bank is known for having among the strongest ROTCE improvement stories among large regional banks.
- Primo Brands (PRIM)
This consumer staples stock with a market value of $10.5 billion is another undervalued stock listed. Its forward P/E is 15.4, PEG is 0.74, and dividend yield is 1.4%.
The methodology for finding these stocks includes a consensus Buy rating, forward P/E below the sector average, PEG below 1.0, one-year positive price growth, and one-year stock price growth despite being undervalued.
In the case of Chart Industries, if the merger with Flowserve is successful, GTLS shares could be undervalued. Stifel believes if Flowserve can deliver the synergy targets without too many missteps, the stock could double in three years. Similarly, analysts believe that Opera's strong underpinnings and strength in e-commerce suggest its 2025 outlook is "appropriately conservative" and there is "potential for upside if the macro doesn't worsen."
Kiplinger suggests buying undervalued mid-cap and small-cap stocks as "big bargains" compared to blue chips, which are currently expensive. Their picks span different sectors and blend growth, value, and income styles for diversification.
- The consensus among analysts indicates that Opera Limited (OPRA), with its low forward P/E and PEG, represents an attractive investment opportunity in the current bear market, making it a potential candidate for investors seeking growth prospects.
- Despite the overall market rally, the Initial Coin Offering (ICO) market has been slower, leading to undervalued stocks like CarGurus (CARG) becoming more attractive, particularly for those seeking to trade in the communication services sector.
- In the finance and investing world, during a bear market, mid-cap and small-cap stocks like Citizens Financial Group (CFG) can be undervalued, offering investors a opportunity to invest in a large regional bank at a lower price due to its strong financial performance and dividend yield.
