Stock prices are often driven by emotions – personal bias. As a result, many solid companies wind up with stocks that are undervalued. It’s been a rough start to the year and markets are taking a beating, but there are bargains to be had. Here are 3 of the most undervalued stocks on the market right now.
1. Alaska Air Group (ALK)
Alaska Air Group is the parent company of Alaska Airlines, and with its regional airline partners, the group serves 95 cities throughout the lower 48 states, Alaska, Hawaii, Mexico and Canada. It’s the seventh largest airline in the United States as far as passenger traffic goes, and it holds more passengers between the contiguous U.S. and Alaska.
The company has recently completed a transition to a full Boeing 737 fleet, and has improved labor relations by signing multiyear contracts with its mechanics, pilots and its flight attendants.
Alaska Airlines’ trailing 12-month price-to-earnings ratio is 11. The stock is currently trading at $70, and analysts are projecting shares to rise to $98 within 12 months. This equates to a gain of almost 29%.
2. Qualcomm (QCOM)
Qualcomm, the chipset maker, is the seventh largest technology company in the United States. The company has a market capitalization of $69.6 billion and currently holds $17.3 billion in cash.
Through its Qualcomm CDMA Technologies branch, the company designs, manufactures and sells chipsets that are used in tablets, laptops and smart phones. Its other segment, Qualcomm Technology Licensing, includes a portfolio of patents used for mobile telecommunications.
As smartphone use continues to expand around the world, Qualcomm will continue to grow. The company’s trailing 12-month price-to-earnings ratio is 14, and the stock is currently trading at $46. The 12 month medium projection is $60, which equates to a 30% gain.
3. Brinker International (EAT)
Brinker International, based in Dallas, currently franchises or operates 1,629 restaurants under the Chili’s Grill & Bar and Maggiano’s Little Italy names. The company is making a push into emerging markets, but is doing so through franchises. It has also sold off its lagging brands, like On the Border Mexican Grill and Cantina, Romano’s Macaroni Grill and Corner Bakery Café, to focus on its core chain Chili’s.
Brinker is also taking steps to transform its two flagship chains through the introduction of new healthy menu items.
The company’s trailing 12-month price-to-earnings ratio is 14, and its median stock price appreciation projection over the next 12 months is 20%.