Are you concerned that the stock market has become too hot to invest in? While the S&P500 has broken records, that doesn’t mean you can’t find good deals in the stock market these days.
Three stocks trading at low valuations are Starbucks (NASDAQ:SBUX), Nike (NYSE:NKE)And CFS health (NYSE: CVS). Here’s why these stocks haven’t been doing well lately and why they could be good investments to add to your portfolio today.
1.Starbucks
The coffee shop giant suddenly has a crisis on its hands. Sales are down and concerns are growing that customers are switching to cheaper coffee options. When the company announced its latest quarterly results on April 30, it reported that consolidated net sales for the first three months of the year fell 2% to $8.6 billion. And worldwide comparable store sales fell by 4%.
Starbucks’ high-priced coffee has generally remained fairly resilient amid inflation and tougher economic conditions, but cracks appear to be finally opening in consumer demand. While the average ticket rose 2% last quarter, comparable transactions fell 6%.
Starbucks shares are down 18% this year. And in May, the stock hit a new 52-week low of $71.80. The stock has risen since then, but investors can still buy shares of the coffee company at a discounted price. At just 22 times earnings, Starbucks is cheaper than the average stock in the S&P 500, which trades at 23 times earnings.
Provided you’re patient with the stock, Starbucks has the potential to be an undervalued buy as the company still has a strong customer base and while sales aren’t great right now, this could be a temporary bump in the road for this solid company. company.
2. Nike
Another brand known for expensive products is Nike. The brand’s clothing is not cheap and for consumers with little money, the prices may end up being too high. The stock is trading just a few dollars away from a 52-week low of $88.66, while Nike shares are down more than 15% this year.
In its most recent quarter, which ended Feb. 29, Nike’s revenue rose just 1% year over year to $12.4 billion. Net profit of just under $1.2 billion fell 5%. But like Starbucks, this could be a minor setback for Nike. According to Piper SandlerThe latest annual teen survey shows that Nike continues to be the top brand among teens in both apparel and footwear categories.
Nike consumers may be spending less, but there’s no reason to doubt the power of the brand as a whole. At 27 times lower earnings, Nike may still be a bit of an expensive stock to own, but if you’re willing to stick with it for the long term, it can be a solid investment.
3. CFS health
The worst-performing stock on this list is pharmacy retailer and healthcare giant CVS Health. It has lost almost a third of its value this year as rising costs weighed on its business.
The company’s revenue has been growing, but investors have been particularly concerned about its profit figures lately. Revenue of $88.8 billion in the first three months of the year rose nearly 4% year over year, but due to rising healthcare costs, operating income of $2.3 billion fell 34%. Investors are also concerned that near-term results may not be that better, with Medicare Advantage rates rising less than expected in 2025.
However, these are short-term problems for the company. CVS has expanded its operations over the years to become a bigger player in the healthcare industry. It is growing beyond pharmacy retail and into pharmacy benefits, health insurance and home health care businesses. And in the long run, it is therefore positioned to play a key role in the overall growth of the healthcare sector.
Today, shares of CVS Health are trading within a few dollars of a 52-week low of $53.70. And at just ten times previous earnings, this is a fairly cheap stock to buy now.
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David Jagielski has no position in the stocks mentioned. The Motley Fool has positions in and recommends Nike and Starbucks. The Motley Fool recommends CVS Health and recommends the following options: Long January 2025 $47.50 calls at Nike. The Motley Fool has a disclosure policy.
The S&P 500 is at record levels, but these three stocks are still near their 52-week lows. originally published by The Motley Fool
