7 Undervalued S&P 500 Stocks to Buy Before Wall Street Catches On

Wall Street has heated up in July following June’s gloomy market behavior. But if you thought it’s too late to act now or even too early to buy, there are undervalued S&P 500 stocks which smartly dictate otherwise and demand going long today.

As the clock ticks down on July and a solid monthly gain of 5% in the large-cap, broad-based S&P 500, the seeds of doubt for some investors persists. And it’s easy to see why. The Federal Reserve is set to raise interest rates once again this week as it attempts to tame inflation while avoiding a recession. Earnings season and its extra layer of uncertainty are in full swing. And of course there’s popular cooler talk that 2022’s bear market is historically unfinished business.

But look in another less popular direction at a confirmed rally in the broader indices or towards a robust Recession Buy Indicator, and it’s fair to expect that investors of these 7 undervalued S&P 500 stocks won’t be feeling buyer’s remorse regardless of the latest headline hazard.

CRM Salesforce $170.18
DIS Walt Disney $99.79
F Ford Motor Co $12.56
AMZN Amazon $114.8
BIIB Biogen $211.02
AMD Advanced Micro Devices $85.03
CF CF Industries $90.46

Undervalued S&P 500 Stocks to Buy: Salesforce (CRM)

Source: Charts by TradingView

Salesforce (NYSE:CRM) is the first of our undervalued S&P 500 stocks to buy.

Many tech companies will be reporting over the coming days, but this enterprise cloud-based software giant blue-chip isn’t set to release its Q2 results until the tail end of August. And that’s a gift for investors right now.

Attractively, CRM stock is at price levels associated with its post-earnings upside reaction from late May following its earnings and sales beat.

What’s more and supporting Salesforce as an undervalued S&P 500 stock, shares are trading for just over six times sales and squarely at trough levels over the past decade despite CRM expecting to deliver full-year revenue growth of 20%.

Technically, investors buying this undervalued S&P 500 stock are also set up for success.

The monthly chart of CRM stock reveals that as of June Salesforce’s bear market has put together a confirmed bottoming candlestick pattern off the Covid-19 76% retracement level slightly above long-term trend support and with the added backing of a bullishly oversold stochastics crossover.

Walt Disney (DIS)

Source: Charts by TradingView

Walt Disney (NYSE:DIS) is the next of our undervalued S&P 500 stocks to purchase.

From storied theme parks to the streaming Disney+ platform and its massive library of classics and future blockbusters, a controlling interest in cable sports powerhouse ESPN or Disney’s four cruise ships and the kiddo’s desires for fun-filled Disney merchandise, Disney is the world’s most diversified entertainment company.

Today DIS stock shares trade at half of their peak valuation of $203 set in March 2021. And while cheaper doesn’t always equate to value, today’s admission price does look like a steal for investors.

Right now this undervalued S&P 500 stock is changing hands for less than 2.5 times sales and just north of Disney’s March 2020 Covid-19 multi-year low of 2.19.

The bear market making Disney’s extreme pricing possible also sets the stage for a very attractive long-term bottom in shares.

With just a handful of sessions left in July, this undervalued S&P 500 stock has established a bullish monthly doji candle off Disney’s decade-plus 62% Fibonacci support. Add a supportive stochastics indicator and that makes the House of Mouse look more like a raging bull for buyers!

Ford Motor Co. (F)

Source: Charts by TradingView

Ford Motor Co (NYSE:F)  is the third of our undervalued S&P 500 stocks to buy.

These days and for many months and years into the future the venerable automaker has the growth driver of the electric vehicle market to exploit . Today, that expertise is already being put to good use with Ford’s sold-out F-150 Lightning pickup, Mustang-E and E-Transit EVs.

Yet despite the rubber meeting the road and forecasts for huge EV sales growth which Ford pegs at 50% by 2030, shares of F stock are a compelling value for bargain hunting investors.

Today and having crashed by about 50% on the back of persistent and broader market drags, Ford is an undervalued S&P 500 stock that offers a below-the-market forward P/E of less than 7, has the financial wherewithal to easily navigate a recession and offers a well-supported dividend of more than 3%.

Right now, investors also have capital gains to look forward too. With F shares signaling an oversold stochastics crossover alongside a monthly reversal pattern that’s tested prior decades-long resistance and Covid-19 related Fibonacci support, this undervalued S&P 500 stock is built to rally strongly with earnings Wednesday night acting as a likely catalyst.

Amazon (AMZN)

Source: Charts by TradingView

Amazon (NASDAQ:AMZN) is the fourth of our undervalued S&P 500 stocks to buy.

The trillion-dollar plus diversified tech giant is among those influential companies reporting earnings this week. Second quarter results are due out Thursday evening. In front of the release shares are seeing a bit of cautious behavior after Walmart (NYSE:WMT) announced a surprise profit warning Monday evening.

Given last quarter’s Amazon’s post-earnings stock drubbing, it could be hard to blame investors’ sympathy reaction. But opportunistically though and more fairly, Amazon isn’t Walmart.

Bottom-line, Amazon remains the 800 lbs gorilla in a still-growing e-commerce market. Also, despite any shorter-term retail challenges, today’s Amazon is so much more. And right now it’s also too attractively-priced to ignore.

Not only is Amazon’s AWS cloud business continuing to lead this key technology market, AWS is growing smartly and offers the company a huge runway for more sales growth with much stronger profit margins than e-commerce.

At the moment investors would also have to go back to 2016 to find Amazon shares trading as cheaply as they are right now based on a price-to-sales multiple of 2.63. But don’t expect this undervalued S&P 500 stock to remain this affordable.

If AMZN’s well-supported and confirmed bottoming pattern have any say in matters, as well as maybe The Motley Fool, there’s strong reasons to see this undervalued S&P 500 stock as a multibagger in the coming decade.

Biogen (BIIB)

Source: Charts by TradingView

Biogen (NASDAQ:BIIB) is the next of our undervalued S&P 500 stocks to purchase.

The biotech giant whose treatments focus on therapies and treatments for neurological and neurodegenerative diseases released a profit and sales beat this past week. Biogen raised both its full-year sales and earnings guidance and the outfit smartly trimmed its pipeline of a couple high-risk/high-reward drugs that had seen setbacks.

But investors showed little interest in the positive results. Shares of this undervalued S&P 500 stock fell nearly 6% in the report’s wake.

Apparently, the failure to produce a strategy update for “life after Aduhelm”, the company’s high profile and abandoned Alzheimer’s drug, got the best of BIIB shareholders.

Today, the negativity appears to culminating in a big-time and near-sighted mistake. Shares are trading at a historically cheap sales multiple of under three and a forward P/E of less than 13.

To be clear, Biogen is a riskier biotech and there’s risks from generics infringing on BIIB’s drug portfolio and the uncertainty of what Biogen’s next breakthrough will be. But there’s always something, right?

And with shares wrestling with six year lows as a monthly bear trap reverses back above key price support, this undervalued S&P 500 stock is well-deserved of gaining a new and more bullish following.

Advanced Micro Devices (AMD)

Source: Charts by TradingView

Advanced Micro Devices (NASDAQ:AMD) is the sixth of our undervalued S&P 500 stocks to buy.

This top semiconductor play blasted street forecasts when the company reported stellar top and bottom-line growth in early May. And coupled with the issuance of upside and above-views guidance, investors also reveled in the results as AMD stock tacked on more than 9% in the immediate aftermath.

Next week Wall Street will get to see if their bullish outlook proves correct. Today though and through no fault of its own and simply a casualty of this year’s broader bear market, opportunity abounds for investors wanting to buy a solid growth story at an attractive discount.

With this undervalued S&P 500 stock roughly 12% lower than AMD’s post-earnings reaction, not only are shares priced at a near three year low versus sales, but they’re also valued at a very reasonable 20 times forward earnings multiple which looks even more attractive given its forecasted five-year growth rate of 28%.

Technically, AMD stock also points towards a more profitably productive cycle for its investors.

With the weekly chart showing a very bullish divergence with stochastics and price action since May’s earnings release and shares wedged in-between converging downtrend and uptrend lines, a breakout and multiple expansion in this undervalued S&P 500 stock looks to be in order.

CF Industries (CF)

Source: Charts by TradingView

CF Industries (NYSE:CF) is the last of our undervalued S&P 500 stocks to buy.

I haven’t saved the best for last, but CF stock is the most under-appreciated of the lot based on the outfit’s forward and below-market P/E of just over 5, PEG ratio of 1.27 and sales multiple of 2.18. What’s more, in early May the company reported quarterly sales growth of nearly 174% and eye-candy earnings that climbed almost 485% year-over-year.

If it sounds too good to be true, it’s not. In our estimation CF stock is more about a historically cyclical story that’s turning into a mega-trend, but not yet being fully appreciated.

CF Industries nitrogenous fertilizer business plays a huge role in the production of corn and other crops. Moreover, it’s in the sweet spot for growth as the global population continues to explode and the more efficient exploitation of those crops is greatly helped with this undervalued S&P 500 stock’s product.

That’s not to say CF stock is the perfect stock. It isn’t.

The nitrogenous fertilizer driving CF’s growth is also assisting in climate change with its greenhouse gas emissions.

Still and if you’re looking to save the manatees and kill a few stock bears in the process, the profits from buying this undervalued S&P 500 stock’s very well-supported ‘bear trap’ correction of 29% into three layers of Fibonacci support since April, should go a long ways towards that philanthropy.

On the date of publication, Chris Tyler holds long positions in Advanced Micro Devices (AMD) (either directly or indirectly) but no other positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.

The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.

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