The 3 Most Undervalued Stocks With Strong Fundamentals to Buy in April 2024
The stock market has been surging over the past several months, which makes it tough to find undervalued stock picks. Investing in undervalued stocks is always a wise strategy, but when they boast strong fundamentals, they’re too good to pass up. That’s why targeting the most undervalued stocks with strong fundamentals to buy in April could prove incredibly lucrative.
Wagering on undervalued stocks with strong fundamentals is a sound strategy because it offers a healthy margin of safety while promising potential for robust returns. Companies with solid fundamentals have proven their mettle over time, weathering multiple headwinds to deliver strong top-and-bottom-line expansion. This approach minimizes risk and capitalizes on the market’s tendency to correct undervaluations.
That said, here are three stocks I picked using the GuruFocus screener. Each of the three most undervalued stocks with strong fundamentals to buy in April has a GF value score of over 80, which is GuruFocus’ property metric for estimating a stock’s intrinsic value using historical data and projections.
American Tower (AMT)
American Tower (NYSE:AMT) is a popular U.S.-based real estate investment trust (REIT) that addresses the growing demand for high-speed connectivity infrastructure. It owns and manages an expansive network of wireless and broadcast towers, which it continues to grow each year.
Moreover, it has been one of the most consistent businesses in its niche, posting impressive numbers across its top and bottom lines each year. To put things in perspective, AMT’s 5-year historical average funds-from-operation (AFFO) growth rate stands at 4.32%, trumping the sector median of 88%. Additionally, EBITDA growth over the same period has averaged at 8.80%, outperforming the sector by 75%. Also, its operational efficiency is shown by its impressive rent-to-average gross property ratio of more than 31%, blowing past the sector median by 141%. Consequently, it’s been a rewarding shareholder with a dividend that’s growing for the past 11 years.
With secular tailwinds at its back, AMT will continue to grow substantially, driven by the relentless expansion of 5G and other emerging technologies. Tiprank’s analysts concur, assigning a “strong buy” rating to AMT stock, pointing to a 20% upside from current prices.
Snowflake (SNOW)
Expectations were sky-high for Snowflake (NYSE:SNOW) to impact the AI arena, but things have been underwhelming so far. The disappointment is shown in its late lackluster stock market performance, with SNOW stock trading 34% lower than its 52-week high price.
However, it’s looking to change that narrative, having appointed AI expert CEO Sridhar Ramaswamy to steer the ship. In his words, “There’s no AI strategy without a data strategy. And this has opened a massive opportunity for Snowflake to address.” The platform’s unique position, with its multi-cloud data platform and the mushrooming demand for data in AI applications, sets the stage for long-term growth.
Nevertheless, the company continues to post double-digit growth in top-line numbers, beating analyst estimates in the past 14 consecutive quarters. If it can capitalize on the massive AI opportunity, expect even stronger numbers over the long-term.
Air Products and Chemicals (APD)
Air Products and Chemicals (NYSE:APD) is a diversified operation specializing in producing industrial gases, equipment and related services across multiple industries. With a comprehensive operational scope and global presence, APD has consistently driven robust fundamentals through its innovative solutions and a focus on high-growth markets.
The softness in its core gas business and the slowdown in the Chinese market have weighed on its top line in the past few quarters. Consequently, its stock also took a hit, losing more than 16% of its value last year.
Nevertheless, it remains a remarkably profitable business, marked by double-digit gross profit, net income and EBITDA margins. Additionally, its return on equity is at an attractive 16%, besting the sector median by 151%. Furthermore, with a future focus on high-demand gases like hydrogen, expect APD to add new layers to its growth story. In realigning its portfolio, it committed a whopping $15 billion towards clean energy projects until 2027. According to Tiprank’s analysts, APD stock is a “strong buy” that has attracted a 13% upside from current prices.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines
