The stock market hit record highs in January, but some stocks fell. How do you know if a stock has become an attractive opportunity after a sharp decline? Discover seven US stocks that have been battered recently and could see significant rebounds.
January was a very turbulent month for the markets. The major indexes hit new record highs, but the gains were uneven. Some stocks surged, while others fell sharply.
Several factors have destabilized investors. Geopolitical tensions have increased, notably between the United States and Europe over Greenland and unrest in Iran. The fourth quarter results also surprised markets, with wide gaps between winners and losers.
Sudden moves like these can also create opportunities. Prices sometimes go both ways, and quick and alert investors can profit when stocks move too far, too fast.
You can estimate the true value of a stock by looking at its fundamentals and using valuation models. When a stock falls sharply in a short period of time, it makes sense to check if the price has fallen below this fundamental value.
InvestingPro does this through its Fair Value tool. It combines the results of multiple valuation models, up to 17 of them, to produce a single, clearer estimate for each security.
This helps investors quickly see whether a stock looks cheap or expensive and understand its upside or downside potential from current levels.
Many InvestingPro users also look at health score as well as fair value. The Health Score is constructed from key financial metrics and comparisons with similar companies to assess the financial strength of a company.
Simply put, a strong opportunity typically combines two elements: high upside potential based on InvestingPro fair value and an above-average health score that signals strong fundamentals.
7 significantly undervalued stocks that took a beating in January
To put this into practice, we used the Investing.com screener. Specifically, we looked for U.S. stocks that met the following criteria:
A market capitalization greater than 1 billion dollars
A drop of more than 20% more than one…..
