September, which is frequently cited as the worst month for the safe stocks market, is living up to that label. The S&P 500 lost 1% since August, which is in line with its 1.1% monthly loss on average since 1928. Of doubt, many investors are scared and unclear about what to do in a weak economy. While doing so, some investors look for some of the market’s most undervalued safe equities, like the handful listed below.
1. Amplify Energy (AMPY)
Amplify Energy surged 15% in the first week of September. For this oil and gas corporation, there is still time to win. One is that it has an adequate and consistent free cash flow, which has been at or above $40 million for the past three years. Two: Amplify has significantly reduced its debt in addition to having enough cash on hand to expand or return value to shareholders. Even that is noteworthy, given how heavily indebted the majority of oil and gas companies remain. For instance, the typical industry debt-to-equity ratio hovers around 0.5, but Amplify’s is less than 0.40.
Finally, despite its growth in September, Amplify’s valuation ratios show the company is still undervalued. It just has a P/E ratio of 0.70. The fact that Amplify’s price-to-book ratio is substantially below 1.00, indicating that its share price does not correspond to its net asset value, is what value investors find most attractive.
2. Berry Global Group (BERY)
Berry Global Group is a stable, inexpensive company because of plastic packaging, which may not be the most exciting investment potential. The business manufactures plastic packaging for the hygiene, engineering, healthcare, and consumer markets. There is a good probability Berry made the bottle if you use prescription medication.
Berry is innovative in the fields of waste management and carbon reduction, which is important for anyone worried about environmental sustainability. Berry’s “A” rating on environmental measures, which includes a commitment to decreasing the environmental impact of packing and achieving net-zero emissions by 2050, is proof of its dedication to a sustainable future.
Berry’s products are in high demand and are widely used, and the company has sustainable innovations that allow it to adjust to shifting consumer demands and retain long-term viability. The price-to-sales ratio and price-to-earnings ratio of this safe stock is both meager, at 0.57 and 11.82 respectively.
3. Intuit (INTU)
With tax season rapidly approaching and more than 80% of Americans completing their taxes electronically, Intuit is unquestionably a secure investment. A well-known software firm with a focus on financial software, Intuit Inc. is best recognized for its TurboTax brand of tax and accounting software. The company stands to gain from the rising number of gig workers and side hustlers in addition to providing comprehensive tax solutions. With a projected $455 billion market by 2030, Intuit offers tax solutions specifically targeting this group.
Intuit posted a net income of $89 million, or 32 cents per share, in its most recent earnings report as opposed to a net loss of $56 million, or 20 cents per share, in the same period the year prior—earnings per share after adjustments were $1.66. Revenue for the company increased 12% from $2.4 billion to $2.71 billion. Despite a great recent track record and a relatively high share price, analysts maintain their Buy recommendation and claim the company is still undervalued.
Also read: Best AI Stocks You Should Buy In UK
4. SK Telecom (SKM)
Although telecom stocks typically trade close to fair value, they are among the safest in the market. Rarely do telecom equities reach inflated valuations, but they also do not frequently fall below fair value. The exception is SK Telecom.
The biggest telecom company in South Korea is called SKM. Despite the substantial market saturation, it still innovates. A little less than 50% of the wireless market in South Korea is serviced by the corporation. However, SKM is also investing heavily in artificial intelligence projects, contributing $100 million to a business that develops multilingual language models and is supported by Google.
SKM is substantially undervalued now and undervalued based on long-term prospects due to its commitment to innovation. This safe stock has a price-to-book ratio of 0.92 and a price-to-earnings ratio of 10.14. With a price-to-earnings ratio of more than 3x SKM’s, or 30.25, the average for the wireless telecom sector, this safe company is undervalued.
5. Advanced Micro Devices (AMD)
Considering its long-term potential, Advanced Micro Devices may not appear to be expensive on its own, but it most definitely is when compared to the whole artificial intelligence industry.
AMD beat analysts’ predictions with non-GAAP earnings of 58 cents per share in its second-quarter 2023 earnings report. The quarter’s revenues totaled $5.36 billion. Despite the slight 0.67% victory, AMD’s prospects are still promising. The management feels confident about the third quarter of 2023. AMD projects revenues to total $5.7 billion in the report. That is a 2.5% increase year over year and a 6.5% consecutive growth. Stability is essential in a growing sector like AI, thus consistent, modest gains are a sign of this.
The strategic acquisitions AMD has made, like the one it made of the French AI software company Mipsology, show how committed the company is to developing its artificial intelligence capabilities. The business has been actively pursuing AI, and in June it unveiled a new GPU for the field.
Despite trading at a seemingly high multiple of earnings (39), AMD is still inexpensive compared to Nvidia, its main rival, valued at a staggering 108.70.
Also read: Will There Be An AI Stock Bubble In 2023?