[ad_1] The post 3 Big-Name Value Stocks and Why They’re Cheap Today appeared first on Millennial Money. We all love a deal, right? Don’t tell me you haven’t been driving down the street to that cheaper gas station. Investors shop around too when they buy so-called value stocks. They’re simply buying companies that others won’t because the other investors are overlooking the businesses’ full potential. When that potential is eventually realized and the stock prices rises, the value investors cash out. As Warren Buffett put it, “If I can buy dollar bills for 90 cents, I’ll buy them.” How Much is $1 Worth? Although Buffett’s strategy sounds easy, determining the value of those dollar bills can be complex. The key to value investing is to sift through all the chatter in the financial news and find a company’s “intrinsic value”—the value a stock would have if everybody in the market were on the same page about the business’s prospects. Once you’re able to find that intrinsic value, the next part is easy: You buy companies whose intrinsic value is higher than the current stock price. Understandably, the concept of “value” is a source of intense debate and involves looking deeper into a business to find an angle that other investors are overlooking. By way of example, here are three businesses that aren’t getting their due in the market today. 1. Verizon Communications Verizon Communications (NYSE:VZ) Price: $55.22 (as of close Aug 5, 2021) Market Cap: 228,948,415,187 document.addEventListener(“DOMContentLoaded”, function(event) { Highcharts.stockChart(“stockChart-c3c2e022bd3ed7467caa976a63d71571”,{rangeSelector:{selected:1},title:{text:”Verizon Communications (NYSE:VZ)Closing Stock Price”},subtitle: {text: “30-Day Historical Data”},navigator: { enabled: false },scrollbar: { enabled: false },credits: { enabled: false },xAxis: { type: “datetime”, labels: { formatter: function() { return Highcharts.dateFormat(“%m %d, %Y”, this.value); }}},colors: [“#118b4e”],rangeSelector : { enabled: false },series:[{name:”NYSE:VZ”,data:[[1625544000000,56.41],[1625630400000,56.53],[1625716800000,55.68],[1625803200000,56.07],[1626062400000,56.15],[1626148800000,56.09],[1626235200000,56.32],[1626321600000,56.55],[1626408000000,56.46],[1626667200000,55.84],[1626753600000,55.58],[1626840000000,55.95],[1626926400000,55.95],[1627012800000,55.88],[1627272000000,55.78],[1627358400000,56.2],[1627444800000,55.72],[1627531200000,55.98],[1627617600000,55.78],[1627876800000,55.76],[1627963200000,55.73],[1628049600000,55.37],[1628136000000,55.3],],tooltip:{valueDecimals:2,xDateFormat: “%A, %B %e, %Y”}}]}); }); You know Verizon. What you might not know is that the company is one of the biggest value stocks in the S&P 500. Verizon’s shares have risen just 6% in the past three years, compared with the S&P 500’s 56% gain. Remember, value investors are looking for stocks that are unloved by most investors, and Verizon certainly fits that bill. Many investors are hesitant to invest in Verizon right now because of its wireless business. The company is still a market leader, but growth in the industry itself is slowing down and also getting highly competitive, with T-Mobile stealing significant market share. Verizon also has much at stake in the declining subscription television business. Not only is this an industry on the decline as consumers cut the cord, but it also requires tons of spending for maintenance. Because of Verizon’s wireless and TV business units, it’s been hard for the company to increase sales. In fact, full-year revenue of $128.3 billion in 2020 was lower than each of the two previous years. Verizon also has debt it needs to pay off, which could affect its profitability if the company’s revenue continues to decline. It’s understandable for Verizon’s stock to be trading at its currently low price, but many value investors think the reduced price is extreme. They point to the company’s growth potential from the Internet of Things that will be powered by 5G connectivity. As long as Verizon is able to make money from this emerging technology, the stock could be considered a true bargain today. How much of a deal is it? I’ll get to the numbers in a bit. Now, another good value stock for you to consider. 2. Berkshire Hathaway (aka) Let Warren Buffett find the deals for you Berkshire Hathaway (B shares) (NYSE:BRK.B) Price: $285.63 (as of close Aug 5, 2021) Market Cap: 640,497,771,916 document.addEventListener(“DOMContentLoaded”, function(event) { Highcharts.stockChart(“stockChart-dca7e45a8451003008add2dae5225318”,{rangeSelector:{selected:1},title:{text:”Berkshire Hathaway (B shares) (NYSE:BRK.B)Closing Stock Price”},subtitle: {text: “30-Day Historical Data”},navigator: { enabled: false },scrollbar: { enabled: false },credits: { enabled: false },xAxis: { type: “datetime”, labels: { formatter: function() { return Highcharts.dateFormat(“%m %d, %Y”, this.value); }}},colors: [“#118b4e”],rangeSelector : { enabled: false },series:[{name:”NYSE:BRK.B”,data:[[1625544000000,277.32],[1625630400000,279.24],[1625716800000,274.1],[1625803200000,280.49],[1626062400000,280.11],[1626148800000,279.21],[1626235200000,278.31],[1626321600000,279.72],[1626408000000,277.9],[1626667200000,272.66],[1626753600000,276.89],[1626840000000,279.88],[1626926400000,277.7],[1627012800000,278.49],[1627272000000,278.8],[1627358400000,280.78],[1627444800000,278.1],[1627531200000,279.76],[1627617600000,278.29],[1627876800000,278.14],[1627963200000,281.8],[1628049600000,278.78],[1628136000000,280.21],],tooltip:{valueDecimals:2,xDateFormat: “%A, %B %e, %Y”}}]}); }); Warren Buffett runs the holding company Berkshire Hathaway, whose M.O. is to invest in other companies—ones that Buffett thinks are selling for less than they’re worth. Berkshire is heavily invested in finance, energy, and transportation. (These are all industries typically associated with value investing.) Buffett recently said that most of the company’s value comes from its insurance businesses (including GEICO), the railroad Burlington Northern Santa Fe, Berkshire Hathaway Energy, and its 5% interest in Apple. Pro tip: Buffett is a master investor, but he talks about investing using language everyone can understand. That makes him an incredible teacher. If you want to learn more about business and investing, check out his most recent annual letter to Berkshire shareholders. Buffett tells it to you straight. However, Berkshire’s value focus is found in more than just its biggest holdings. As of year-end 2020, Berkshire owned 5% or more in three major banks, including Bank of America, Bank of New York Mellon, and U.S. Bancorp. As for why Berkshire is a deal today, think of it as a collection of companies that were deals when Buffett bought them. 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