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Despite some areas of the market rallying, analysts recommend buying inexpensive stocks.

Analysts name cheap stocks to buy even as some parts of markets rally

Analysts name cheap stocks to buy even as some parts of markets rally

Despite economic uncertainty in the United States, the markets have rallied this year. The S&P 500 is up about 10% so far this year, while the Nasdaq has soared approximately 24%. Nevertheless, only a few stocks, especially mega-cap tech, are responsible for most of the gains, according to analysts.

“At current levels, we believe the broader markets are pricey, especially given the earnings decline that is expected in first- and second-quarter earnings reports,” said Michael Landsberg, Chief Investment Officer at Landsberg Bennett Private Wealth Management, in an interview with CNBC’s “Street Signs Asia” recently.

“On the other hand, some analysts believe some parts of the markets are still worth buying. The market is so far “very focused” on the prospect of a recession caused by the U.S. Federal Reserve’s tightening of monetary policy, said Charles Bobrinskoy, head of the investment group at Ariel Investments. “As a result, anything cyclical is cheap,” he added.

“In fact, we are very close to the end of Fed interest rate increases. When the market becomes convinced of no more rate increases, we could get a rally in cyclical names,” Charles Bobrinskoy noted.

Some analysts and portfolio managers recently named stocks that are still cheap, including some in the tech sector. “We are using short term volatility as a buying opportunity,” said Adam Coons, Chief Portfolio Manager at Winthrop Capital Management, in a note sent to CNBC. One of the stocks he named was U.S. semiconductor firm Qualcomm, which has made developments in the application of the internet of things.

“QCOM has lagged other chipmakers and the valuation is just too cheap on a relative basis given the growth possibilities for QCOM over the next 5 years,” Coons explained. Meanwhile, Bobrinskoy named three stocks with price-to-earnings ratios trading at under 10. One of them is American auto supplier BorgWarner, whose P/E ratio is eight.

Bobrinskoy recommended Goldman Sachs, whose P/E ratio is eight. “What’s not cheap — our growth stocks and tech stocks and they’ve had a massive rally here … And those stocks are trading at multiples of in excess of 30 times earnings,” Charles Bobrinskoy told CNBC’s “Street Signs Asia” last week. “So we would say don’t buy what’s in favor – tech and growth. Look at what’s out of favor — value stocks, and particularly cyclical stocks,” he added.

FAQs:

Q: What is causing economic uncertainty in the United States?
A: The tightening of monetary policy by the U.S. Federal Reserve is causing economic uncertainty in the United States.

Q: What stocks are responsible for most of the gains in the markets?
A: Only a few stocks, especially mega-cap tech, are responsible for most of the gains in the markets, according to analysts.

Q: Which parts of the markets are still worth buying, according to some analysts?
A: Some parts of the markets, such as cyclical stocks, are still worth buying, according to some analysts.

Q: Which stocks are still considered cheap by analysts?
A: Some stocks that are still considered cheap by analysts include U.S. semiconductor firm Qualcomm, American auto supplier BorgWarner, and Goldman Sachs.

Q: What advice did Charles Bobrinskoy give to investors?
A: Charles Bobrinskoy advised investors to avoid buying what’s in favor, such as tech and growth stocks, and look at what’s out of favor, particularly value stocks and cyclical stocks.

Analysts name cheap stocks to buy even as some parts of markets rally
Analysts name cheap stocks to buy even as some parts of markets rally

Despite certain market rallies, analysts recommend purchasing inexpensive stocks.

Despite economic uncertainty in the United States, markets have rallied this year, with the S&P 500 up by around 10% and the Nasdaq soaring about 24%. However, analysts have noted that only a few stocks, namely mega-cap tech, are responsible for most of the gains. “At current levels, we believe the broader markets are pricey, especially given the earnings decline that is expected in first- and second-quarter earnings reports,” said Michael Landsberg, Chief Investment Officer at Landsberg Bennett Private Wealth Management. Despite this, some analysts still believe parts of the markets are worth buying, with Charles Bobrinskoy, Head of Investment Group at Ariel Investments, stating that the market is very focused on the prospect of a recession caused by the U.S. Federal Reserve’s tightening of monetary policy. In fact, some analysts and portfolio managers recently identified stocks that are still cheap, including U.S. semiconductor firm Qualcomm and American auto supplier BorgWarner.

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