With the holidays approaching, it might be time to get a head start on your shopping list. However, instead of Christmas gifts, we’re talking about stocks to add to your portfolio.
With the fourth quarter typically being one of the best times of year for the stock market, now is a great time to add some new positions.
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To find companies with the best chance for success, GOBankingRates looked for undervalued stocks to buy. These companies have strong fundamentals, but their stock price doesn’t reflect their overall health. To find the best undervalued stocks to buy, GOBankingRates looked for companies with a low price-to-earnings (P/E) ratio and a significant amount of free cash flow compared to the stock price.
Here are three undervalued stocks to buy before 2025.
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After recently being upgraded to a buy rating from Zacks, FHI’s stock price has risen. However, even with the price increase, Ulrich Ebensperger, co-Founder and CEO of Ziggma.com, still thinks FHI is a great undervalued stock to have in your portfolio.
“FHI is an attractive value stock on multiple accounts,” said Ebensperger. “First of all, priced at 9x 2025 earnings, FHI is a very inexpensive stock. Secondly, Federated Hermes is one of the most profitable companies in its industry.
“With a 15% return on assets, it handily beats well-known peers, such as Blackrock or Blackstone, on account of profitability. I’d like to highlight the strong focus on shareholder value as shown by consistent share buybacks. Furthermore, FHI’s shareholders benefit from 5.95%.”
Beyond its attractive P/E ratio, FHI also has a PEG below one, meaning its price is inexpensive when adjusted for earnings growth. Many experts also consider the company’s price-to-book (P/B) value when determining whether a stock trades at a value. With a P/B of 3, FHI is significantly below some of its biggest competitors.
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During its recent earnings call, pharmaceuticals company United Therapeutics reported record revenue of $715 million for the second quarter of 2024 — 20% higher than the same period a year earlier.
This is one of several reasons why UTHR is trading near its 52-week high. Even so, Ebensperger felt this company is still trading at a value and could be poised to move even higher.