Wall Street Favorites: 3 Undervalued Stocks With Strong Buy Ratings for January 2024

While some of the heavily hyped enterprises of last year continue to do well this month, investors ought to consider ideas for undervalued stocks January 2024. True, nothing technically stops a security from rising and rising. Eventually, though, a correction materializes. Generally speaking, a greater threat exists that the high-flyers will incur a slowdown, not the underappreciated ideas.

Of course, the market will not give you guarantees. Still, just from a common sense standpoint, undervalued stocks January 2024 may offer greater breadth of upside potential. Since they’re already operating away from the limelight, should some positive catalyst appear, the underdogs could swing northward with gusto. However, the key is to consider ideas that Wall Street also believes in.

Just like in baseball, you don’t want to swing at every pitch. Instead, you should wait for the right one. Here, analysts are putting their weight behind these less-heralded ideas. With that, below are undervalued stocks January 2024.

CVS Health (CVS)

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A healthcare company best known for its retail pharmacy chain, CVS Health (NYSE:CVS) is involved in other subsegments, such as the pharmacy benefits management business along with health insurance. Per its public profile, CVS represents the world’s largest healthcare company. However, it’s not trading like it. A quick look at its 52-week chart reveals an enterprise struggling for traction.

Still, that also makes it one of the intriguing undervalued stocks January 2024. Looking at its financials, CVS trades for only 8.58X forward earnings. In contrast, the sector median stands at 12.35X. Per investment data aggregator Gurufocus, CVS is more undervalued than almost 86% of competitors in the healthcare plans industry. Plus, it’s not a “junk” multiple as the company enjoys a return on equity of 11.76%, better than 63% of rivals.

To be sure, CVS faces rising pressure from new competitors. However, it’s also important to note that the company commands an extensive store network. Its massive footprint would be difficult to displace. Combine that with customer loyalty and you can see why CVS rates as a consensus strong buy.

Titan Machinery (TITN)

red tractor in yellow field with clouds behind it

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One of the largest dealers of agricultural and construction equipment, Titan Machinery (NASDAQ:TITN) should be relevant in any economic cycle. However, the shocker of stubbornly elevated inflation along with high interest rates impeded the broader economy. Unfortunately, these and other headwinds contributed to TITN’s steep decline over the past 52 weeks. However, since late October, TITN bulls have attempted to engineer a comeback.

If you’re a risk-taker, TITN could be one of the intriguing ideas for undervalued stocks January 2024. Financially, Titan offers some enticing stats. Its three-year revenue growth rate clocks in at 18.4%, above nearly 82% of its peers. Also, its EBITDA growth rate soars to 46.2%. Even with these impressive stats, TITN trades at only 5.82X trailing-year earnings (without non-recurring items). That’s well below the sector median of 13X.

Further, as the uranium market demonstrated recently, the fundamentals eventually matter. A growing global population will consume more resources so TITN could see increased demand, especially in the core agricultural realm. Unsurprisingly, analysts rate shares a strong buy with a $37.20 price target.

Carriage Services (CSV)

A funeral scene with casket and flowers.

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Anytime we’re dealing with the true inevitability of life – that it ends – it’s an uncomfortable proposition. However, it’s a reality. Setting aside various religious beliefs, it’s a harsh reality. And so, we have Carriage Services (NYSE:CSV), one of the most compelling ideas for undervalued stocks January 2024. Yes, CSV hasn’t performed that well over the trailing year. But it aligns with an irrefutable logic.

Moreover, in recent sessions, the bulls appear to have reentered the space. Notably, in the business week ending Jan. 26, CSV gained almost 5% of equity value. Even so, shares still trade at a discount. For example, CSV’s forward earnings multiple sits at 10.68X, below the sector median 15X. And it doesn’t seem a throwaway multiple given its 15.7% three-year revenue growth rate combined with consistent profitability.

Yes, it is a growth machine and a reliable profitability generator because why wouldn’t it be? They aren’t making any new lands and demand only rises. To no shock, analysts rate CSV a unanimous strong buy with a $35.33 average price target.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the biedexmarkets.com.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.