Are magnificent 7 stocks overvalued?
The 'Magnificent Seven' stocks are actually undervalued vs. the rest of the market, JPMorgan says. Morningstar.
Magnificent Seven Stocks Aren't Overvalued—Cyclicals Are, J.P. Morgan Says. The Magnificent Seven stocks are raking in returns this year, but their valuations don't look stretched, J.P. Morgan argued on Monday.
| Symbol | Name | Price (Intraday) |
|---|---|---|
| UAL | United Airlines Holdings, Inc. | 43.62 |
| DAL | Delta Air Lines, Inc. | 43.12 |
| BMY | Bristol-Myers Squibb Company | 52.34 |
| LYG | Lloyds Banking Group plc | 2.4900 |
Nvidia Is the Best-Performing "Magnificent Seven" Stock: Here's Why I Wouldn't Buy. The aptly named "Magnificent Seven" is a group of (mostly) technology companies that have generally delivered above-average returns, especially over the past decade.
The top undervalued, non-penny stocks on the NYSE or the Nasdaq for March 2024 that trade below $50 per share include Joyy, Ebang International Holdings, STRATTEC Security, Central Plains Bancshares, EuroDry, Landsea Homes, Viatris, Alico, Universal Stainless & Alloy Products, EQT, and Consolidated Water Co.
- Alphabet.
- Amazon.com.
- Apple.
- Meta Platforms.
- Microsoft.
- Nvidia.
- Tesla.
If investors purchase overvalued stocks at inflated prices, they will likely experience significant losses when the price eventually corrects its intrinsic value. This can cause long-term damage to an investor's portfolio and retirement savings.
| Company name & symbol | Percent change in share count over quarter | Value of investment at end of quarter |
|---|---|---|
| Sirius XM (SIRI) | 316% | $220,129,000 |
| Chevron Corp. (CVX) | 14% | $18,808,080,000 |
| Occidental Petroleum (OXY) | 9% | $14,552,270,000 |
In the post, he echoed the statements of Andy Schectman, president of precious metals investment firm Miles Franklin, sharing, “Andy Scheckman says: 'Silver is the most undervalued asset of a generation. ' I agree.”
| Stock Name | Sub-Sector | Share Price |
|---|---|---|
| Coal India Ltd | Mining - Coal | ₹382.6 |
| Varun Beverages Ltd | Soft Drinks | ₹1,266.35 |
| Eicher Motors Ltd | Trucks & Buses | ₹3,635 |
| Bharat Electronics Ltd | Electronic Equipments | ₹189.25 |
What is the most profitable stock to buy right now?
| Company (Ticker) | Forward P/E Ratio |
|---|---|
| Humana (HUM) | 13.9 |
| Fidelity National Information Services (FIS) | 13.4 |
| Citigroup (C) | 8.0 |
| Lear (LEA) | 7.7 |
The "Magnificent Seven" stocks of the tech world -- Apple, Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Amazon, Meta Platforms, Microsoft, Nvidia (NASDAQ: NVDA), and Tesla -- are a great place to start.
Warren Buffett's Berkshire Hathaway (BRK. A) commands the No. 1 position, with an impressive stock price of over half a million dollars.
| Stock | 2024 performance through Feb. 29 |
|---|---|
| Super Micro Computer Inc. (SMCI) | 204.7% |
| Vera Therapeutics Inc. (VERA) | 206.1% |
| SoundHound AI Inc. (SOUN) | 250% |
| Viking Therapeutics Inc. (VKTX) | 314% |
This still-relevant index still has some stocks that hold the potential for significant gains. Two Dow components that remain relevant are Amazon (NASDAQ: AMZN) and Nike (NYSE: NKE). Let's find out a bit more about these two stocks and why they are set to soar in 2024 and beyond.
| Ticker | 10-Year Performance (%) | |
|---|---|---|
| 1 | CELH | 68,350.2% |
| 2 | NVDA | 19,568.7% |
| 3 | AMD | 5495.6% |
| 4 | SMCI | 5197.5% |
- Aris Water Solutions, Inc. (NYSE:ARIS)
- XPeng Inc. (NYSE:XPEV)
- NIO Inc. (NYSE:NIO)
- ANI Pharmaceuticals, Inc. (NASDAQ:ANIP)
- Concentrix Corporation (NASDAQ:CNXC)
- Fiverr International Ltd. (NYSE:FVRR)
- Perion Network Ltd. (NASDAQ:PERI)
- StoneCo Ltd. (NASDAQ:STNE)
- Alphabet (Class A shares, GOOGL): 17.83 forward P/E ratio.
- Meta Platforms: 21.56.
- Apple: 23.9.
- Nvidia: 30.43.
- Microsoft: 31.07.
- Amazon: 33.95.
- Tesla: 41.14.
Dubbed the Magnificent Seven stocks, Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Meta Platforms and Tesla lived up to their name in 2023 with big gains. But the start of 2024 has shown a big divergence of returns.
Price-earnings ratio (P/E)
A high P/E ratio could mean the stocks are overvalued. Therefore, it could be useful to compare competitor companies' P/E ratios to find out if the stocks you're looking to trade are overvalued. P/E ratio is calculated by dividing the market value per share by the earnings per share (EPS).
How can you tell if a stock is overvalued?
The sales per share metric is calculated by dividing a company's 12-month sales by the number of outstanding shares. A low P/S ratio in comparison to peers could suggest some undervaluation. A high P/S ratio would suggest overvaluation.
Generally, undervalued shares are favored over overvalued ones, as the investors buy low and sell high. If the company is performing well, it can give promising returns. Buying an overvalued share doesn't have this advantage, as the price returns to its intrinsic value, which is lower.
- Apple.
- Bank of America.
- American Express.
- Coca-Cola.
- Chevron.
| Ticker | Company | % Portfolio |
|---|---|---|
| BRK.B | Berkshire Hathaway Inc. | 16.80% |
| CNI | Canadian National Railway Co. | 16.29% |
| WM | Waste Management Inc. | 14.92% |
| CAT | Caterpillar Inc. | 5.14% |
| Stock | Q4 change in shares | Change |
|---|---|---|
| Chevron Corp. (CVX) | +15,845,037 | +14.4% |
| HP Inc. (HPQ) | -79,666,320 | -77.7% |
| Apple Inc. (AAPL) | -10,000,382 | -1.1% |
| Occidental Petroleum Corp. (OXY) | +243,715,804 | +8.7% |
