10 New 4-Star Stocks This Week
ASML and Applied Materials are among the stocks that fell into undervalued territory.
Every Monday morning, get Morningstar’s insights on company news, the latest stock market trends, and in-depth company reports from our analysts. Sign up for our Stock Strategist newsletter here.
Once a week, we screen the US-listed stocks under Morningstar’s coverage for newly undervalued names—those whose prices have just fallen into ranges worthy of 4- or 5-star Morningstar Ratings. For the week ended Oct. 16, 10 stocks saw their ratings change to 4 stars, while three joined the 74 US-listed names in 5-star territory.
The five new 4-star stocks with the largest market capitalization are:
The full list of new 4-star stocks is at the bottom of this story. All returns in this article are reported in the stock’s base currency, and all data is sourced from Morningstar Direct.
What Is the Morningstar Rating for Stocks?
The Morningstar Rating can help investors identify stocks that are truly undervalued or overvalued, cutting through the market noise. The rating is determined by three factors: a stock’s price, its fair value estimate—Morningstar’s estimate of its intrinsic worth—and its Uncertainty Rating, which captures the range of potential outcomes for that estimate. Stocks rated 4 or 5 stars are considered undervalued, those rated 3 stars are fairly valued, and the ones rated 1 or 2 stars are considered overvalued.
The Latest Stock Valuation Changes
The Morningstar US Total Market Index fell 2.06% over the past week as of Oct. 16, leaving the overall US stock market moderately undervalued, hovering at an 8% discount to its fair value estimate on a market cap-weighted basis.
Of the 869 US-listed stocks covered by Morningstar analysts:
- 43% are undervalued, 40% are fairly valued, and 17% are overvalued.
- 10 are newly undervalued.
- 11 are newly overvalued.
- Three moved from a 4-star rating to a 5-star rating.
- Five moved from a 5-star rating to a 4-star rating.
- No newly undervalued stocks jumped from a 3-star rating to a 5-star rating.
- 30 are no longer undervalued.
Metrics for This Week’s New 4-Star Stocks
ASML ASML
- Morningstar Rating: ★★★★
- Fair Value: $2,050.00
- Uncertainty Rating: High
Following a 7.8% loss over the past week, semiconductor equipment and materials firm ASML saw its Morningstar Rating move to 4 stars from 3. ASML has lost 7.91% over the past three months and has gained 62.07% over the past year. The large-growth stock has a wide economic moat. ASML is trading at a 20% discount to its fair value estimate of $2,050 per share, with an Uncertainty Rating of High.
Applied Materials AMAT
- Morningstar Rating: ★★★★
- Fair Value: $520.00
- Uncertainty Rating: High
Semiconductor equipment and materials firm Applied dropped 19.28% over the past week, bumping its Morningstar Rating to 4 stars from 3. The company’s stock is down 26.96% over the past three months and is up 80.75% over the past year. The stock’s price is 21% below its fair value estimate of $520 per share, with an Uncertainty Rating of High. The large-growth stock has a wide economic moat.
Arista Networks ANET
- Morningstar Rating: ★★★★
- Fair Value: $230.00
- Uncertainty Rating: High
Computer hardware company Arista lost 18.34% over the past week, shifting its Morningstar Rating to 4 stars from 3. Arista has climbed 5.00% over the past three months and 21.21% over the past year. The stock is trading at a 23% discount to its fair value estimate of $230 per share, with an Uncertainty Rating of High. Arista is a large-growth company with a wide economic moat.
Western Digital WDC
- Morningstar Rating: ★★★★
- Fair Value: $420.00
- Uncertainty Rating: High
Following a 16.43% loss over the past week, computer hardware company Western Digital saw its Morningstar Rating move to 4 stars from 3. Western Digital has lost 28.86% over the past three months and has gained 164.15% over the past year. The large-growth stock has no economic moat. Western Digital is trading at a 21% discount to its fair value estimate of $420 per share, with an Uncertainty Rating of High.
Monolithic Power Systems MPWR
- Morningstar Rating: ★★★★
- Fair Value: $1,650
- Uncertainty Rating: High
Semiconductor company Monolithic Power lost 12.65% over the past week, shifting its Morningstar Rating to 4 stars from 3. Monolithic Power has dropped 7.12% over the past three months and has climbed 18.69% over the past year. The stock is trading at a 27% discount to its fair value estimate of $1,650 per share, with an Uncertainty Rating of High. Monolithic Power is a mid-growth company with a wide economic moat.
This article was generated with the help of automation and reviewed by Morningstar editors. Learn more about Morningstar’s use of automation.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
United States