Bargains Still Exist--Even in This Market
Here are three growth stocks that we think are attractively priced.
Since we launched the Morningstar Rating for stocks in 2001, there have been three extended periods when we thought stocks in general were bargains: immediately after 9/11, the period from the spring of 2002 to the spring of 2003, and, most recently, the middle months of 2006.
This third period was the least extreme of the bunch--the median stock we cover was 4% undervalued in July, which is hardly something to get excited about--and it appears to have come to a close. The median price/fair-value ratio of our coverage universe now stands at 1.03, meaning that the median stock we cover is 3% overvalued, in our view. The number of stocks with 5-star ratings--our highest rating--has dropped to less than 100, which is only 5% of our coverage universe.
Haywood Kelly, CFA has a position in the following securities mentioned above: EBAY, WU. Find out about Morningstar’s editorial policies.