5 Deep Value Stocks To Buy in July

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Need to Know Key Points:

• Warren Buffett champions value investing, focusing on undervalued companies with strong fundamentals for long-term growth and stability.

• Buffett's value investing emphasizes thorough analysis, patience, and buying stocks at prices below their intrinsic value for substantial returns

• However, if your also interested in growth stocks you need to grab a copy of 24/7 Wall Street’s brand-new AI report, “The Next NVIDIA. ” You’ll discover many other stocks that could benefit from supplying NVIDIA and the next wave of growth in AI trends.

Everyone wants to get more bang for their buck. Whether shopping at a local retail hotspot or headed for a night out, you’re likely looking for ways to save money. Why not save money on your investments too?

That’s where value stocks come in. These stocks typically have valuation characteristics that represent a discount compared to their competitors; investing in them can pay off. The general idea is that stocks won't trade at a discount forever. Once the market picks up on the deal,  supply and demand take will hold, pushing the stock to a more realistic valuation.

Polaris Offers a Deep Discount

Polaris ( NYSE: PII ) is an American power sports manufacturer that recently earned a spot in our 5 Growth Stocks to Buy With 25% Plus Upside article. That’s because analysts have strong opinions of the stock, with a consensus price target that sets the stage for meaningful growth ahead.

But Polaris isn’t just a growth opportunity. It’s also a value stock. Here are some value metrics to consider:

• Price-to-Earnings (P/E) Ratio : The Polaris P/E ratio is 11.9. That’s 60% lower than its 5-year quarterly leverage, which currently stands at 29.7.
• Price-to-Book (P/B) Ratio : The stock’s P/B ratio is showing a similar trend at 3.36. That’s significantly lower than its 4.5 5-year quarterly average.

Though it’s important to mention that these valuation metrics are largely the result of disappointing recent quarterly results, a turnaround could be on the horizon. Recently, there has been softer demand for off-road vehicles, likely driven by high interest rates hindering borrowing. But, there’s a strong argument that the Federal Reserve may cut its federal funds rate soon, cutting borrowing costs in turn. This could drive further demand leading to a recovery in Polaris.

Moreover, while earnings per share (EPS) was down 22% in the last quarter, much of that drop was driven by high interest costs on the company’s side, which a Fed rate cut may help to cure. So now may be a good time to dive into the Polaris discount.

The Johnson & Johnson Discount Could End Soon

Johnson & Johnson ( NYSE: JNJ ) is a household name known for its long list of consumer hygiene and health products. But the company’s work stretches far beyond consumer goods. It also produces pharmaceuticals and medical equipment, driving substantial revenue in the process.

Despite the company’s 187% year-over-year net margin growth, its 9% quarter-over-quarter net income growth and 6% year-over-year gross profit growth are exciting valuation metrics. The stock’s 9.8 P/E ratio is more than 50% lower than its 5-year average, and its P/B ratio is around 14% lower than its 5-year average.

So, what’s driving the discount?

Much of the recent declines in JNJ share prices may be caused by recent talcum powder litigation. Unfortunately, that litigation led to the company needing to pay $700 million to the collective plaintiffs of the lawsuit.

On the other hand, it’s easy to argue that the risk associated with talcum powder litigation has already been priced into the stock. Moreover, as a household name will significant revenues, Johnson & Johnson should have no problems making a strong recovery ahead. So now may be the time to tap into the discount.

Altria Group Offers a Smoking Hot Discount

Altria Group ( NYSE: MO ) is the tobacco company that produces Marlboro brand cigarettes, NJoy brand vapor products, and other tobacco products and smoking cessation aides. And it’s a hefty dividend payer, recently earning a spot on our 5 Passive Income Stocks to Buy In July article.

But strong passive income isn’t the only reason to consider an investment in Altria Group. The stock is also a compelling value play to consider, even though its EPS and net income were both up more than 50% on a year-over-year basis in the last earnings report. Altria Group’s P/E ratio is 10.1. That’s over 60% lower than its 5-year average of just over 26.

Kraft Heinz Offers a Tasty Discount

Kraft Heinz ( Nasdaq: KHC ) is a household name with namesake products like Kraft Macaroni and Cheese and Heinz Ketchup. But, those aren’t the only products Kraft Heinz manufactures and sells. In fact, the company offers a long list of brands like Bagel Bites, Cool Whip, and more.

However, the company has fallen on hard times recently. Inflation has led to increasing prices, which has also hindered demand for the company’s products. As a result, the company produced lower-than-expected revenue in the most recent quarterly report.

That may prove to be an opportunity. That’s because it drove the company’s stock price into discount territory. Its P/E ratio is nearly 60% lower than its 5-year average, and its P/B ratio is over 10% below its 5-year average.

The company has already put together a comprehensive plan to address the problems it’s facing. That plan focuses on supply chain efficiency, marketing, and other cost-cutting and income-driving efforts. Considering Kraft Heinz’s history, there’s no reason to expect anything less than a strong recovery ahead.

T-Mobile Is Calling All Value Investors

T-Mobile ( NASDAQ: TMUS ) may be the last on this list, but these stocks are in no particular order; this mobile phone carrier may even offer the largest opportunity. The American telecommunications brand is a household name. In fact, with 31% of the U.S. mobile phone subscription market share , you may be one of the company’s customers.

And the stock represents a discounted opportunity to tap into potential future gains.

That’s because the stock’s PE ratio is nearly 50% lower than its 5-year average despite a recent 140% increase in EPS and a 129% increase in net income on a year-over-year basis.

With such strong earnings, you may wonder why the stock has such impressive valuation metrics. This is one of those occurrences in which a strong valuation isn’t related to a recent decline in share prices. In fact, TMUS shares are up more than 12% on a year-over-year basis.

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