5 Best Undervalued Shares to Buy in July 2021

The stock market has been a wealth making space for traders who can abide by a strict trading regime. While many day traders run after timely volatility to produce quick gains, long-term investors follow trends that can compound growth. Regardless of what trading or investment strategy you follow, it’s always a good idea to focus on undervalued shares. These are shares that are undervalued and have room to grow and demonstrates a unique propensity. But which shares are they? Read the following list to find out.

1. Viacom CBS Inc. (NASDAQ: VIAC)

Viacom CBS Inc has established itself as a well-known media and entertainment company, primarily known for its CBS television network. However, the company got involved in a margin call incident. The mistake was made by investment banks who were functioning as  Archegos’ brokers during asset allocation. It mistakenly sold Archegos Capital Management’s large position in ViacomCMS instead of adding cash to individual accounts.  The shares dropped more than 60% from Match’s high caused by an artificial dip in the company due to that large sale.

As people continue to remain at home due to lockdowns, streaming services have experienced quite an increase in demand. Paramount, which is under Viacom, expected to have more than 70 million customers within the next three years. These shares are objectively inexpensive compared to their counterparts, with a P/E ratio of 10.32x, while that of the overall media industry stands at 19.83x.

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2. QUALCOMM Incorporated (NASDAQ: QCOM)

Qualcomm is arguably the world’s biggest digital wireless telecommunications products and service provider. The company has recently transitioned to 5G, otherwise known as the Fifth-generation mobile network. It has quickly established itself as the frontrunner among premier 5G products and service providers.

Since they bottomed out in 2020 due to the Covid-19 pandemic, shares of Qualcomm have soared nearly 150%. If you are unfamiliar with what has taken place in the last year, you may assume that these shares represent anything but the value at the moment. However, the 5G industry is still in its fledgling stage and Qualcomm is ready to lead the industry into the transition. Thus, the current price may suggest a significant year-on-year increase, but the company’s fundamentals suggest that there is room for even more growth. Share prices won’t go down if Qualcomm continues to be a major contributor to the 5G revolution.

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3. STORE Capital Corporation (NYSE: STOR)

As a globally managed REIT, STORE Capital Corporation specialises in the management, investment and acquisition of Tenant Operational Real Estate. It is one of the largest and fastest-growing companies in its sector, currently equipped with a diverse portfolio. STORE was badly hit as a result of the pandemic, which currently has 2500 properties. But a buying opportunity has presented itself for this company after last years tribulations.

2020 was disastrous for the retail industry as a whole and any company renting commercial space. It made it extremely hard for REITs to collect their rent from tenants and many stores shut up shop for good. However, STORE was one of the few companies that weathered the storm and are looking stronger than ever as it emerges from the pandemic era. In the REIT market where everything appears overexaggerated, STORE is a fairly valued share. Its P/E value of 44.08x is a lot less than its peers in the REIT sector.

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4. Alibaba Group Holding Limited (NYSE: BABA)

Known as the Amazon of China, Alibaba has become a giant e-commerce company that provides online, mobile and commercial businesses to both international and domestic clients. Innovation Initiatives, Digital Media and Entertainment, Core Commerce and Cloud Computing are some of the services it offers. Founded in 1999, the company achieved decades of healthy growth, most recently benefiting from the pandemic. As more people used online platforms for their needs, revenues for Alibaba shot up. However, it soon faced a barrage of hurdles.

Chinese regulators prevented Alibaba’s financial arm, Ant Group from going public. Shortly after this move from regulators, founder Jack Ma was suspected of missing. Because of these two coinciding events, shares of Alibaba dropped 42.6% in a matter of months. Prices have rebounded back since then, creating a great entry point for the company.

Alibaba, as part-owner of Ant Group Co,  is looking to enter the fintech industry in a big way. Aside from the fact that it already owns Alipay, there are reports that the fintech company might host its first initial public offering.  Alibaba will benefit greatly from this move.  Despite being a successful company, Alibaba shares are not overpriced. It has maintained a fair valuation throughout the pandemic which has cemented it as one of this month’s best-undervalued stocks.

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5. Appian Corporation (NASDAQ: APPN)

Appian Corporation enables small and large companies to automate coding across applications and websites. With Appian, companies no longer need to spend a lot of money for low-code automation, as it enables its clients to build enterprise-level applications at a cheaper price. Appian’s growth has coincided with the demand from companies for getting into low-code automation. From a valuation perspective, Appian’s latest run makes it look expensive. Its price-to-sales ratio is well above the industry average of 18.17x at 29.66x. If everything pans out, today’s expensive valuation seems like a bargain in the future.

Appian Corporation’s management team believes that there is a looming $37 billion market opportunity in the market. This means that the latest increase in stock prices may just be beginning. The company also provides signs of building a strong customer base with a 98.0% cloud subscription renewal rate. Today’s valuation will look a lot better for Appian Corporation if it can capture even a small share of its total addressable market.

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Conclusion

As a trader or investor, one of the best ways to find undervalued stocks is to look at their true values of price-to-earnings ratio, price-to-sales ratio and other metrics that measure a company’s value. The above shares are some of the undervalued ones that you can look out for in July 2021.

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