The stock market might be trading around all-time highs -- and it even might look like it'll go even higher -- but that doesn't mean every last stock is trading with the same sentiment. In fact, a number of industries and individual stocks are trading at recession-esque multiples.
Those are the kinds of places that value investors should be watching like a hawk for new stocks to buy.
In fact, if you think (like I do) that the broader markets are going higher, you don't even need to necessarily limit yourself to true bargains right now. A number of stocks aren't necessarily cheap, but they are well off their respective highs, and these relative bargains are going to be the kinds of stocks that drive the next leg higher.
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Here are nine stocks to buy, in no particular order, that fit this bill and that look poised to outperform the market for at least the rest of the year.
General Motors (GM)
What do investors start doing when multiples and valuations get stretched? They start looking for safety in value and dividends.
On that front, there is no better choice than
While the S&P 500 is quickly trending towards a 20x earnings multiple, GM stock -- which is off by nearly 10% year-to-date -- trades at a ludicrous 5 times forward earnings. At the very least, GM's multiple screams safety to worried investors and suggests that downside is limited.
Couple that with GM's 5% yield, and you shouldn't be surprised to see investors gravitate toward the stock in the weeks and months to come.
XPO Logistics (XPO)
XPO Logistics (XPO) has been on a tear since reporting earnings last Thursday, up more than 25%. That said, XPO still is another 40% away from all-time highs set last year, and prior to the report, XPO was trading at even lower multiples to future earnings than GM.
However, no one trusted that those earnings expectations would be met, mainly because XPO had never reported a profit in the
Now that XPO blew analyst expectations out the water by reporting a
Much like XPO,
Yes, Apple's revenue declined 14.5% in its most recent quarter. However, that was good enough to beat very low expectations. And the fact is that expectations still are low for future quarters, and with Apple moving to a next-generation iPhone launch, comps will be favorable to deliver big growth in the year ahead.
Combined with a 2% yield, massive buybacks and a stock trading at 12 times forward earnings, AAPL looks poised to surge much higher.
American International Group (AIG)
However, AIG is loaded with an aggressive stock buyback plan, and there are countless reasons why AIG stock is perfect for value investors. This is a stock that trades at just 70% of its book value per share in an insurance segment that is strengthening.
Given its recent momentum coupled with its attractive valuation, there is little doubt that AIG stock is one to outperform the market in the foreseeable future.
Bank of America (BAC)
While AIG seems cheap, BofA may be the cheapest big stock in the market, trading at just 65% of its book value per share.
Therefore, BAC stock has a good shot to trend upward to levels of its big bank competitors, many of which exceed their book value per share.
Michael Kors (KORS)
Gilead Sciences (GILD)
For nearly a year I have said that
With sales of Gilead's blockbuster Hepatitis C (HCV) franchise finally peaked, and now on the downswing, it might not seem like a good time to buy GILD stock. However, Gilead trades at 7 times earnings, pays a 2%-plus yield and buys back stock aggressively.
In other words, it looks like a bargain hunter's dream in an otherwise pricey market.
Not to mention, the HCV franchise may be declining, but GILD's year-over-year revenue losses the next two years are in single digits. Hence, it is not an abrupt decline, thereby adding more reasons why GILD is deserving of a higher multiple.
The big concern is that
With KR expected to grow more than 5% in each of the next two years, it is far too good of a company to trade at 13 times forward earnings. Given that supermarket sales are a very secular industry,
Yes, crude oil prices are just a shade of what they used to be. However, BP is the perfect example of a company that adapts to its surrounding and is now better prepared for the future than ever before.
Since 2014, BP has cut