Because the economic recovery is expected to continue with the Fed leaving interest rates unchanged, we think it could be wise to bet on value stocks rather than high-flying stocks that might suffer a pullback due to the heightened market volatility. Considering their solid growth prospects, BASF (BASFY), Hitachi (OTC:HTHIY), Suzuki (SZKMY), Covestro (COVTY), and Vishay Intertechnology (NYSE:VSH) look significantly undervalued at their current price levels. So, it could be wise to scoop up these stocks. Let’s look closer.Because a significant improvement in employment and record GDP growth has convinced Fed Chairman Jerome Powell to start bond tapering this year, the central bank doesn’t intend to hike the benchmark interest rates in the near term. Consequently , the Nasdaq Composite and S&P 500 hit their all-time highs on Monday. However, amid the rising inflation, which the Fed deems “transitory,” it could be risky to bet on high-flying stocks even if they possess fundamental strength. That’s because any correction experienced by the market could lead to a significant price decline for these stocks on profit taking.
So, we think it could be wise to bet on stocks that are trading at discounts to their peers despite possessing fundamental strength. The current valuations of BASF SE (OTC:BASFY), Hitachi, Ltd. (HTHIY), Suzuki Motor Corporation (SZKMY), Covestro AG (COVTY), and Vishay Intertechnology, Inc. (VSH) have yet to increase to match their growth potential. So, it could be wise to bet on these stocks now.
BASF SE (BASFY)