Buying high-quality shares at a discount can significantly boost a portfolio when the market eventually re-evaluates their true worth. Here, I want to highlight a pair of value stocks that look very cheap to me right now.
Daily weight-loss pill on the way
First up to consider is Novo Nordisk (NYSE: NVO). The pharmaceutical stock’s had a torrid time, plunging 60% inside 12 months.
This slide has left it trading on a forward price-to-earnings (P/E) ratio of just 14. For a world-class healthcare company expected to post double-digit growth in both revenue and earnings over the next three years, that looks very cheap. There’s also a forecast dividend yield of 3%.
But a stock doesn’t crash 60% for no good reason. So what’s the catch here? Well, Novo owns the blockbuster GLP-1 drugs Ozempic and Wegovy, but it’s struggling to go one step further and develop a next-generation obesity pill.
Meanwhile, rival Eli Lilly appears to be pulling ahead. Its recent late-stage trial for orforglipron, a daily pill for diabetes sufferers who were also obese, showed an average weight loss of 16 pounds (7.9% of body weight) over nine months. The firm said the GLP-1 pill can be taken any time of day without any restrictions on food and water intake.
This type of treatment could eventually replace injections, creating a truly massive global market opportunity. However, it isn’t expected to get full approval and be launched before 2026.
In the meantime, sales of Ozempic and Wegovy should remain strong. Novo Nordisk stock looks to be on sale and is therefore worth considering for long-term investors. But there could be more volatility in the near term as US pharmaceutical tariffs are currently being drawn up.
Out of fashion
The second stock that looks really cheap right now is JD Sports Fashion (LSE: JD). Shares of the FTSE 100 sportswear retailer are down 54% in just seven months!
The problem here has been the global slowdown in consumer spending over the past couple of years. High inflation and interest rates have taken their toll, with people less willing and able to shell out for the latest branded sportswear. These are ongoing issues.
Related to this, sales at key partner Nike have been very weak. Nike products account for around 45-50% of JD’s global revenue.
On the flip side, any signs of a turnaround at the US athleisure giant would be very welcome news. Additionally, JD’s multi-brand strategy means it can still benefit from the growth of labels such as HOKA and On Running. And Adidas‘ sales have held up pretty well recently, considering the global slowdown.
I also like the fact that JD’s a truly global company these days. It has growing operations in both Europe and Asia, while its acquisition of US-based Hibbett means it now has an extra 1,000+ stores across the pond.
JD operates within an attractive, long-term growth market and we are well positioned to continue growing market share. We have strong brand partner relationships and an agile, multi-brand model which allows us to drive, and respond quickly to, market trends.
CEO Régis Schultz, April 2025.
Trading at 72p, the stock’s forward P/E ratio’s just 6.3. At that valuation, I think it’s worth considering.
