9 New 5-Star Stocks This Week
Alphabet and Marvell are now seen as significantly undervalued.
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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 5-star stocks with the largest market capitalization are:
The full list of new 5-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 5-Star Stocks
Alphabet GOOGL
- Morningstar Rating: ★★★★★
- Fair Value: $450.00
- Uncertainty Rating: Medium
Internet content company Alphabet lost 12.61% over the past week. Alphabet has dropped 16.08% over the past three months and 0.32% over the past year. The stock’s fair value estimate rose to $450 per share from $433 during the week. It ended the week trading at a 38% discount to its new fair value estimate, with an Uncertainty Rating of Medium. Alphabet is a large-core company with a wide economic moat.
Marvell Technology MRVL
- Morningstar Rating: ★★★★★
- Fair Value: $360
- Uncertainty Rating: High
Following a 14.05% loss over the past week, semiconductor company Marvell saw its Morningstar Rating move to 5 stars from 4. Marvell has gained 7.17% over the past three months and 122.11% over the past year. The large-growth stock has a narrow economic moat. Marvell is trading at a 45% discount to its fair value estimate of $360 per share, with an Uncertainty Rating of High.
NetEase NTES
- Morningstar Rating: ★★★★★
- Fair Value: $200.00
- Uncertainty Rating: High
Electronic gaming company NetEase lost 4.19% over the past week, shifting its Morningstar Rating to 5 stars from 4. NetEase has dropped 13.49% over the past three months and 16.30% over the past year. The stock is trading at a 43% discount to its fair value estimate of $200 per share, with an Uncertainty Rating of High. NetEase is a large-core company with a narrow economic moat.
Alnylam Pharmaceuticals ALNY
- Morningstar Rating: ★★★★★
- Fair Value: $299.00
- Uncertainty Rating: High
Biotechnology firm Alnylam dropped 26.35% over the past week, bumping its Morningstar Rating to 5 stars from 4. The company’s stock is down 19.70% over the past three months and 63.30% over the past year. The stock’s price is 45% below its fair value estimate of $299 per share, with an Uncertainty Rating of High. The mid-growth stock has a narrow economic moat.
Watsco WSO
- Morningstar Rating: ★★★★★
- Fair Value: $441.00
- Uncertainty Rating: Medium
Industrial distributor Watsco lost 6.01% over the past week. Watsco has dropped 1.22% over the past three months and 12.25% over the past year. The stock’s fair value estimate rose to $441 per share from $433 during the week. It ended the week trading at a 31% discount to its new fair value estimate, with an Uncertainty Rating of Medium. Watsco is a small-value company with a narrow 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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