Morningstar’s latest stock valuation update reveals 24 new 4-star stocks and nine new 5-star stocks for the week ended Oct. 30. The Morningstar US Total Market Index fell 0.41% over the past week, leaving the overall US stock market moderately undervalued at a 10% discount to its fair value estimate.
The five largest newly undervalued stocks by market capitalization are HSBC Holdings (HSBC), Caterpillar (CAT), Banco Bilbao Vizcaya Argentaria (BBVA), Elevance Health (ELV), and Ecolab (ECL). HSBC, a diversified bank, lost 5.80% over the past week and is trading at a 20% discount to its fair value estimate of $107 per share. Caterpillar, a heavy machinery company, dropped 9.14% and is trading at an 18% discount to its fair value estimate of $760 per share.
Banco Bilbao Vizcaya Argentaria, another diversified bank, saw a 5.79% loss and is trading at a 22% discount to its fair value estimate of $30 per share. Elevance Health, a healthcare plans company, dropped 4.52% and is trading at a 17% discount to its fair value estimate of $508 per share. Ecolab, a specialty chemicals company, gained 5.01% and is trading at an 8% discount to its fair value estimate of $330 per share.
Of the 875 US-listed stocks covered by Morningstar analysts, 42% are undervalued, 40% are fairly valued, and 18% are overvalued. The Morningstar Rating helps investors identify undervalued or overvalued stocks by considering a stock’s price, its fair value estimate, and its Uncertainty Rating.