33 Cheap Stocks to Buy in Q2: Morningstar

The U.S. stock market finished the first quarter up more than 10% as measured by the Morningstar US Market Index, investment strategist Susan Dziubinski wrote in a recent blog post. Dziubinski noted that stocks look fairly valued heading into the second quarter according to Morningstar metrics. A composite of the stocks in the firm's coverage shows that the U.S. stocks market was trading at a price/fair value of 1.03 at the end of March, compared with a 12% discount to fair value one year ago. What might that mean for the remainder of this year? "In our view, it is unlikely that what has worked for the last year and a half will be what continues to work," Dziubinski's colleague, chief U.S. market strategist David Sekera writes. "We think now is a good time for investors to look for contrarian investment opportunities, especially in those areas that have underperformed, are unloved — and most importantly — undervalued." See the gallery for a brief summary of how valuations stack up across sectors as of March 31, according to Morningstar.