4 New 5-Star Stocks This Week

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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 Nov. 6, 40 stocks saw their ratings change to 4 stars, while four joined the 56 US-listed names in 5-star territory.

The four new 5-star stocks, ordered by market capitalization, are:

• Taiwan Semiconductor Manufacturing TSM
• Lumentum LITE
• Baker Hughes BKR
• CoreWeave CRWV

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 2.6% over the past week as of Nov. 6, leaving the overall US stock market significantly undervalued, hovering at a 12.0% discount to its fair value estimate on a market cap-weighted basis.

Of the 877 US-listed stocks covered by Morningstar analysts:

• 40% are undervalued, 41% are fairly valued, and 18% are overvalued.
• 41 are newly undervalued.
• 30 are newly overvalued.
• Three moved from a 4-star rating to a 5-star rating.
• 18 moved from a 5-star rating to a 4-star rating.
• One newly undervalued stock jumped from a 3-star rating to a 5-star rating.
• 54 are no longer undervalued.

Metrics for This Week’s New 5-Star Stocks

Taiwan Semiconductor Manufacturing TSM

• Morningstar Rating: ★★★★★
• Fair Value: $534.00
• Uncertainty Rating: Medium

Following a 7.56% loss over the past week, semiconductor company TSMC saw its Morningstar Rating move to 5 stars from 4. TSMC has lost 9.99% over the past three months and has gained 31.13% over the past year. The large-growth stock has a wide economic moat. TSMC is trading at a 30% discount to its fair value estimate of $534 per share, with an Uncertainty Rating of Medium.

Lumentum LITE

• Morningstar Rating: ★★★★★
• Fair Value: $1,255.00
• Uncertainty Rating: Very High

Communication equipment firm Lumentum dropped 35.94% over the past week. The company’s stock is down 35.73% over the past three months and is up 124.71% over the past year. The stock’s fair value estimate rose to $1,255 per share from $750 during the week. It ended the week trading at a 57% discount to its new fair value estimate, with an Uncertainty Rating of Very High. The mid-growth stock has a narrow economic moat.

Baker Hughes BKR

• Morningstar Rating: ★★★★★
• Fair Value: $70.00
• Uncertainty Rating: Medium

Oil and gas equipment and services company Baker Hughes lost 13.33% over the past week, shifting its Morningstar Rating to 5 stars from 4. Baker Hughes has dropped 23.43% over the past three months and has climbed 2.34% over the past year. The stock is trading at a 32% discount to its fair value estimate of $70 per share, with an Uncertainty Rating of Medium. Baker Hughes is a mid-value company with no economic moat.

CoreWeave CRWV

• Morningstar Rating: ★★★★★
• Fair Value: $108.00
• Uncertainty Rating: Very High

Software infrastructure firm CoreWeave dropped 15.44% over the past week, bumping its Morningstar Rating to 5 stars from 4. The company’s stock is down 45.62% over the past three months and 56.61% over the past year. The stock’s price is 57% below its fair value estimate of $108 per share, with an Uncertainty Rating of Very High. The mid-core stock has no economic moat.