I am constantly in the market looking for undervalued stocks after all the name of the game is to buy low and sell High while remaining patient and in today's video we are going to discuss four stocks that appear cheap to me right now all of them undervalued from a fundamental perspective and before we dive into these four stocks do me a huge favor click that like button down below show your appreciation and it really helps with the algorithm and also consider subscribing to the channel so you'll be notified anytime we drop new content and let's jump into [Music] it hey everyone Mark rusen here back for another video as always I'm a CPA and not a financial adviser so please do not take this as Financial advice and if you're looking for more stock picks consider checking out the mle fool right now when you go to the fool. com slm mark you could sign up to receive their 10 best stocks to buy right now completely free and they have a ton of other great offerings all right let's jump back into today's video taking a look at four stocks that appear to be rather undervalued and all four of these stocks are actually in correction territory and for those of you that don't understand what that means that means they have had pullbacks of at least 10% or more from their recent highs and let's begin with our first undervalued stock which is Visa stock ticker V many of you know Visa as the largest Payment Processing Company credit card company in the US but not not just in the US they are Global the company currently has a market cap of $514 billion over the past month Shares are down 2% over the past year they are up 7% but looking at where they've fallen off their highs Shares are incorrection territory albeit slightly down 11% I've often said that Visa is one of the highest quality stocks on the market they give you growth potential strong free cash flows which turns into strong dividend growth as as well the company has a unique position and they have some fantastic data that they get to utilize to their benefit on consumers they get to see spending habits delinquency rates and so much more here's a look at the company's latest earnings where you could see the company grew its Revenue by 10% with earnings growing 20% and as an investor when it comes to Visa transaction volume is going to be key as you can see here payments volume increased 7% cross border volume increased 14% % and process transactions grew 10% all things we like to see moving in the right direction however there are some concerns as it pertains to visa and more importantly the global economy we have seen here in the US the economy start to slow we have seen some cracks in the job market slower economic growth and job loss usually equates to less spending less spending equates to lower transaction volumes lower transaction volumes adversely affects a company like Visa here are two graphs that I found within the Visa earnings presentation showing that volume growth peaked back in May and has been falling since which can explain the drop in the stock as well however as it pertains to My Philosophy I love investing in highquality companies at low valuations even if its short-term headwinds are in front of us because there's nothing fundamentally wrong with the business it's just an economic cycle that we're going through Visa is a company that has shown their ability to continue to grow their revenues year in and year out and they operate the business quite efficiently which generates tons in free cash flow they have a free cash flow margin in excess of 50% in terms of fundamentals Visa is trading at a forward PE multiple of 23. 4 times using next year's earnings estimates that is well below the company's 5year average of 31.
8 times now at first glance that looks like a massive discount but we do have to admit growth rates are slowing so does the company still warrant that 32 times multiple is the question in my personal opinion again not Financial advice I believe 32 times is too high something closer to 27 times is more likely which still makes this stock look quite cheap at a 27 times multiple that would imply a price Target closer to $300 per share and where analysts stand right now that's not too far off when looking at other analysts they have an average 12-month price target of 314 implying 21% upside from current levels in addition to all this Visa has been a strong dividend grower as well although the yield is less than 1% their 5-year dividend growth rate is over 15% which is quite strong and that leads us to undervalued stock number two which is Lululemon stock tier L luu and Lululemon hit the ground running pretty much in the early 2000s the company is headquartered over in Canada they currently have a market cap of $30 billion but the shares have not been performing all that well over the past month Shares are down 16% over the past year they're down nearly 40% and looking at how far they have fallen off their recent highs shares of lemon are down 53% I tend to be a lot more careful as it pertains to investing in retail companies whether it's retail apparel or whether it's retail think of fast food or any food company because Trends are always changing especially in today's generation and the other thing as it pertains to Lululemon or Lulu leemon as some people want to say is the fact that they have come across intense competition not just with the likes of Nike and Under Armour but even private companies like viori so what has been going on at Lulu to cause the stock to decline well competition is one but here's a look at the company's latest earnings where you could see the company grew its Revenue by 10% with earnings growing 11% and comparable same store sales at 7% all things that are growing but those growth rates are well below their historical averages and as you can see here women's Revenue grew 10% men's Revenue grew 15% whereas women's is a larger share of overall company revenues digital online sales increased 8% and the company continues its strong International expansion plan with International revenues increasing 35% but America only grew 3% which is where some of those concerns are right now in addition to slowing growth Trends right now the Americas account for nearly 34 of total company revenues so although the expansion plans are ambitious and the growth is there it's still a very small piece of the pie when it comes to lud lemon it's really going to be all about the economy now they have a higher income clientele so those earners are going to be able to stay a lot longer but you're going to see them start to trade down if in fact we fall into a bit of a recession in terms of fundamentals this is where Lulu looks quite intriguing shares currently trade at a forward PE multiple of just 15. 3 times that is well below the company's 5-year historical average of 42 times a 15 times multiple is easily below the S&P 500 Market multiple which makes Lulu that much more intriguing usually stocks with multiples below the greater Market are slower growing companies Lou Lemon is is still a company that is growing its earnings at a double digit rate and they can expand and get that moving even faster as their expansion plans continue to come online when looking at other analysts they have an average 12-month price target of $375 per share implying an impressive 55 upside from current levels that is very bullish and although I'm bullish on the stock I'm not sure if I'm that bullish over the next 12 months and that leads us to undervalued stock number three which is am Amazon stock ticker amzn and I know I've covered Amazon on a few recent videos but at current levels I still don't want you to miss this fantastic opportunity in this big-time growth driver the company currently Sports a market cap of $1. 8 trillion over the past month Shares are down 133% however over the past year they are up 20% since earnings though and since reaching their highs just a month ago Shares are down 15% so incorrection territory themselves when it comes to Amazon they have a ton of growth drivers I love companies that have a diversified Revenue stream they could go and pull from cloud with AWS they can go over to advertising obviously they have retail subscriptions and so much more from a valuation perspective Amazon looks quite cheap especially for the growth that's coming and although when it comes to grow stocks I don't like to look at PE ratios we're still going to look at it just to remain consistent but I'm going to show you a few others as well analysts are calling for the company to generate 2025 EPS of $5.
88 per share which equates to a forward PE of just 28. 9 times for a stock that has a three-year average EPS growth rate of 35% that equates to a PEG ratio below one at 0. 82 which again anything below one is very intriguing but that's not all on an EV to eida perspective Shares are trading at just 17 half times to put this into perspective this is the cheapest that you could buy this stock based on the multiple over the course of the past decade plus that includes the 2022 stock market crash that we saw that is incredible value for Amazon and analysts actually agree as they currently rate the stock a strong buy with an average 12-month price target of $225 per share implying an impressive 28 8% upside from current levels and that leads us to the fourth stock on our list undervalued stock number four the Walt Disney Company stock ticker D and through the first three companies that we looked at you could all see the growth potential that they've both had and can reignite however when it comes to Disney there hasn't been really any growth at all it's been a stock that has been reeling so when we're looking at Disney we're going to look at it with a very different lens we are looking pure CLE L from a value play and when we're talking about the house of mouse there is a turnaround story that has to take place here and will take place but you cannot discount the amazing assets that this company has Disney currently trades at a market cap of $156 billion and over the past month Shares are down 12% over the past year down 4% and looking from where they were at from their 52e highs shares have pulled back 31% in fact if you look out even further Disney shareholders over a 5-year period have lost more than 30% of their investment and when you compare that to what the S&P 500 has done over that time span which is doubled that is rough to take so what's going on with Disney well they've been going through executive changes CEO Bob Iger is back at the helm how long will he be there that'll be a question mark they've also gone through proxy fights takeover attempts and a weakening eon omy so let's take a closer look at valuation to see does this company make sense analysts currently have 2025 EPS estimate at $526 per share which would equate to 7% year-over-year growth analysts are looking for 133% growth the following year that gives us a forward PE multiple on next year's earnings of 16.
3 times that is below a market multiple the company's 10-year average for comparable purposes is 25 times we want to go even further out their 20-year average is 21. 4 times so today's value is well below both of those figures and growth is expected to pick back up after getting derailed by the pandemic however that pandemic did help in other facets they launched Disney plus right after the pandemic took place and had they not launched it at that exact point in time I don't think they would be where they're at today as you had Millions across the globe that were pretty much locked in front of their television and speaking of Disney Plus in the most recent quarter Disney plus just became profitable for the business which is well in advance of the company's original goals Disney plus subscribers have surpassed 150 million but they did top out at 164 million back at the end of 2022 taking a look at valuation again in terms of EV to eida shares trade at just 14. 8 times that is the lowest we have seen for Disney shares since 2018 in terms of free cash flow shares currently trade at a 10.
