Major stock market indexes such as the S&P 500 and Nasdaq 100 have returned to bull market territory (+20% from their recent lows). However, unfortunately, many investors have missed out on these gains as they’ve been sitting on the sidelines.
The good news is that it’s not too late to capitalise on the current bull market. With that in mind, here are three stocks that are yet to really run, and still offer a lot of value today.
A dirt-cheap FinTech stock
First up is payments company PayPal (NASDAQ: PYPL), which is listed in the US. This stock has been a major laggard this year. While the S&P 500 index has climbed over 15%, PayPal has gone backwards.
I think this is a great buying opportunity. At its current share price, PayPal sports a forward-looking P/E ratio of just 13.5. That’s a steal, to my mind.
Given that it operates in the e-commerce industry, this company still has plenty of growth potential. Over the next decade, this industry is projected to grow at over 10% per year.
It’s worth noting that Apple is trying to nab PayPal’s lunch on the payments front. This adds some uncertainty.
At today’s share price and valuation however, I like the risk/reward setup.
Long-term growth potential
The next stock I want to highlight is alcoholic beverages company Diageo (LSE: DGE).
This is a company with a brilliant track record when it comes to generating shareholder wealth. However, this year, it has underperformed from an investment perspective.
I’ve been buying the dip.
This company has a world-class portfolio of brands (Johnnie Walker, Tanqueray, and Smirnoff are some examples). And with over 40% of its revenues coming from the emerging markets (where wealth is rising rapidly), I think it should do well over the long run.
Diageo shares currently trade on a P/E ratio of around 19. I think that’s a very reasonable valuation, given the company’s track record and growth potential.
One risk that’s worth mentioning however, is a legal battle with rapper Sean Combs. This has created some short-term uncertainty.
A play on the EV industry
Finally, in the small-cap space, I like the look of Volex (LSE: VLX). It’s an under-the-radar British manufacturing company that makes power cords and cables for the electric vehicle (EV), data centre, healthcare, and consumer electronics industries.
This is a company with a lot of momentum right now. Recently, it reported 18% revenue growth for the 52 weeks to 2 April, driven by 33% growth in its EV division.
This isn’t reflected in the stock’s valuation however. Currently, the forward-looking P/E ratio here is just 11.8. That’s less than the UK market average.
It’s worth noting that this stock has had a big jump in the last three months. So there’s the risk of a pullback.
It’s still well below its highs though. This leads me to believe there’s further room to run.
