April 24 2016
As the stock market approaches fresh record highs, investors are on a hunt for stocks that won't cost them much, but will have plenty of upside in the future.
This week, the S&P 500 and Dow Jones Industrial Average traded at their highest levels of 2016, boosted by positive earnings reports. On the horizon, traders are looking to constructive remarks by Federal Reserve officials, which may yet lift stocks to all-time highs.
With markets at lofty levels, where can investors find opportunity? Sarat Sethi of Douglas C. Lane & Associates told CNBC he looks for undervalued companies poised to pop.
When hunting for value, Sethi has a formula. "Stock picks should have solid balance sheets, bigger than market dividend, lower multiples, strong management teams, the ability to keep cutting costs, and growing top line," he suggested.
Along those lines, Sethi made a case for three names: General Motors, Qualcomm, and Macy's.
Despite trading down 4 percent year-to-date, Sethi is a believer inGeneral Motors. "GM is not getting credit for new products and management," he argued.
On Thursday, the auto maker posted strong first quarter earnings, well above Wall Street forecasts. The surge in sales came from higher profit margin SUV and crossover vehicles.
General Motors pays a 5 percent dividend yield.
Source : http://www.cnbc.com/2016/04/22/3-stocks-to-buy-right-now-top-value-investor.html
