33 Undervalued Stocks for Q4: Morningstar  

Related: 33 Undervalued Stocks for Q3: Morningstar

The U.S. stock market finished the third quarter down by about 3%, as measured by the Morningstar US Market Index. Through the end of September, the index in 2023 is up by nearly 13%. As the fourth quarter begins, stocks look undervalued, Morningstar investment specialist Susan Dziubinski wrote in a recent blog post. A composite of the stocks in Morningstar's coverage indicates that the U.S. stock market is trading at a price/fair value of 0.92, translating to an 8% discount to the firm's fair-value estimate at the end of the third quarter. That compares with a 16% discount to fair value at the beginning of 2023. "Between the market pullback and raising our fair value estimates on a handful of stocks, the market is now back to trading at an attractive discount," said David Sekera, Dziubinski's colleague and Morningstar chief U.S. market strategist. By investment style, small-value stocks are currently most undervalued, trading 38% below Morningstar's fair-value estimate, according to Dziubinski's examination of stock market valuations. For their part, large core stocks are 2% overvalued. By sector, all sectors but energy are undervalued. By Morningstar's economic moat rating, which signifies a company's competitive advantages, wide- and narrow- moat stocks are undervalued by 7% each, while no-moat stocks are 18% undervalued. See the accompanying gallery for 33 undervalued stocks for the fourth quarter, according to Morningstar analysts.