24 New 4-Star Stocks This Week
HSBC and Caterpillar are among the stocks that fell into undervalued territory.
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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. 30, 24 stocks saw their ratings change to 4 stars, while nine joined the 72 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 can be found 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 0.41% over the past week as of Oct. 30, leaving the overall US stock market moderately undervalued, hovering at a 10% discount to its fair value estimate on a market cap-weighted basis.
Of the 875 US-listed stocks covered by Morningstar analysts:
- 42% are undervalued, 40% are fairly valued, and 18% are overvalued.
- 24 are newly undervalued.
- Nine are newly overvalued.
- Nine 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.
- 22 are no longer undervalued.
Metrics for This Week’s New 4-Star Stocks
HSBC Holdings HSBC
- Morningstar Rating: ★★★★
- Fair Value: $107.00
- Uncertainty Rating: Medium
Diversified bank HSBC lost 5.80% over the past week. HSBC has dropped 19.85% over the past three months and has climbed 27.08% over the past year. The stock’s fair value estimate rose to $107 per share from $101 during the week. It ended the week trading at a 20% discount to its new fair value estimate, with an Uncertainty Rating of Medium. HSBC is a large-core company with a narrow economic moat.
Caterpillar CAT
- Morningstar Rating: ★★★★
- Fair Value: $760.00
- Uncertainty Rating: Medium
Heavy machinery company Caterpillar dropped 9.14% over the past week. The company’s stock is down 22.85% over the past three months and is up 7.70% over the past year. The stock’s fair value estimate rose to $760 per share from $720 during the week. It ended the week trading at an 18% discount to its new fair value estimate, with an Uncertainty Rating of Medium. The large-core stock has a wide economic moat.
Banco Bilbao Vizcaya Argentaria BBVA
- Morningstar Rating: ★★★★
- Fair Value: $30.00
- Uncertainty Rating: High
Following a 5.79% loss over the past week, diversified bank Bilbao Vizcaya Argentaria saw its Morningstar Rating move to 4 stars from 3. Bilbao Vizcaya Argentaria has lost 13.70% over the past three months and has gained 25.45% over the past year. The large-core stock has a narrow economic moat. Bilbao Vizcaya Argentaria is trading at a 22% discount to its fair value estimate of $30 per share, with an Uncertainty Rating of High.
Elevance Health ELV
- Morningstar Rating: ★★★★
- Fair Value: $508.00
- Uncertainty Rating: High
Healthcare plans company Elevance dropped 4.52% over the past week, bumping its Morningstar Rating to 4 stars from 3. The company’s stock is up 12.06% over the past three months and 33.06% over the past year. The stock’s price is 17% below its fair value estimate of $508 per share, with an Uncertainty Rating of High. The mid-value stock has a narrow economic moat.
Ecolab ECL
- Morningstar Rating: ★★★★
- Fair Value: $330.00
- Uncertainty Rating: Medium
Specialty chemicals company Ecolab gained 5.01% over the past week. Ecolab has climbed 8.75% over the past three months and 19.12% over the past year. The stock’s fair value estimate rose to $330 per share from $305 during the week. It ended the week trading at an 8% discount to its new fair value estimate, with an Uncertainty Rating of Medium. Ecolab is a mid-core 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.
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