With current markets soaring, discerning investors are on the hunt for undervalued must-buy stocks. Amid the bullish trend that began in October 2022, finding stocks with genuine value can be challenging. Yet, the market’s occasional indiscriminate selling opens doors to potential bargains, particularly in the cases of PDD Holdings, Booking Holdings, and Alphabet. These companies have recently faced setbacks, but their long-term growth prospects remain solid, suggesting they are currently undervalued.
Unjustified Market Reactions and Future Prospects
PDD Holdings, the powerhouse behind the popular shopping app Temu, witnessed a sharp decline in stock prices, dropping from over $150 to below $130, following rumors of a potential U.S. import ban. The fears stem from allegations of forced labor in its supply chain. However, considering the company’s continued investment in the U.S. market and its minuscule e-commerce share relative to giants like Amazon, this setback seems a mere hiccup in its expansive growth trajectory.
Booking Holdings, another victim of market overreaction, saw its stock plummet by more than 9% post-earnings announcement despite showcasing impressive year-on-year growth. With a 24% increase in gross travel bookings and a 25% rise in total revenues for the year 2023, Booking Holdings demonstrates unwavering dominance in the travel booking sector, making it an attractive investment option.
Alphabet’s recent dip, attributed to the flawed launch of its AI product Gemini, has caused concerns among investors. Despite this, Alphabet’s entrenched position in AI research, coupled with its dominance in search and growing revenues from YouTube and Google Cloud, underscore its potential for recovery and growth.
Analyst Insights and Valuation Metrics
Despite the setbacks, analysts remain bullish on these stocks. PDD Holdings, with an impressive growth outlook, is viewed favorably with a price target suggesting over 40% upside. Booking Holdings, following its robust performance in 2023, is expected to see its EPS grow by 15% to $174.77 in 2024, presenting a compelling buy at 20 times forward earnings. Alphabet, amidst temporary AI hiccups, continues to be a key player in technology, with its AI and digital assets positioning it for a strong comeback.
Long-term Growth Amid Short-term Noise
The recent selloffs affecting PDD Holdings, Booking Holdings, and Alphabet highlight the market’s sometimes myopic perspective, failing to account for these companies’ underlying strengths and growth potential. Investors willing to look beyond short-term volatility and focus on fundamentals may find significant value in these stocks. As market leaders in their respective domains, their current undervaluation presents a unique opportunity for those seeking robust long-term returns.
As the market continues to evolve, discerning investors should closely monitor these companies. Their ability to navigate short-term challenges and capitalize on long-term growth trends could result in substantial gains, making them must-buy stocks in today’s market.