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Exclusive Story These 3 Stocks Trade at Discounts the Market Won't Ignore ForeverBy Dan Schmidt. First Published: 1/5/2026. 
Quick Look - The S&P 500 posted another gain above 15% in 2025, but the market is now approaching historically concerning valuation levels.
- When valuations are elevated, slowing earnings growth is harshly punished, and investors often turn to value stocks for safety.
- These three large-cap stocks all trade well below their industry-average P/E ratios, which could help protect against market volatility in 2026.
The S&P 500 finished 2025 with a total return of about 18%, marking the third consecutive year above historical norms, though below the gangbusters 25% returns of 2023 and 2024. AI euphoria remains the dominant market theme entering 2026, and familiar leaders like NVIDIA Corp. (NASDAQ: NVDA) and Alphabet Inc. (NASDAQ: GOOGL) moved higher again on the first trading day. If you rode the AI rally since the 2022 market bottom, you're likely sitting on substantial gains and may be looking to diversify, especially if you have a tech-heavy allocation. The S&P 500 enters the year trading at about 26x forward earnings, well above its 20-year average of roughly 16x. When valuations are this elevated, investors demand strong earnings growth, and high-multiple stocks can fall out of favor quickly if growth disappoints. If interest rates remain high, 2026 could be a year when value investing reasserts itself. While President Trump's official salary is $400,000 per year... his tax returns reveal he's been collecting up to $250,000 PER MONTH from one hidden source. Until recently, most Americans couldn't touch the type of investment that makes up this investment. But thanks to Executive Order 14330, that just changed. If you love investing in disruptive new companies... Discover how to invest in the fund Trump uses to collect this income >> Below are three ways to de-risk a portfolio by adding stocks that start the year undervalued and overlooked. Each company discussed trades at a substantial discount to its industry average, yet fundamental and technical tailwinds suggest those discounts may not persist. Comcast: Strong Balance Sheet and Sports Expansion Enhance Outlook The Comcast Corp. (NASDAQ: CMCSA) was one of the biggest victims of the cord-cutting revolution, as customers migrated away from expensive cable packages toward a la carte streaming services. Investors dislike a lost decade, and Comcast is trading near the same price it fetched in May 2016. But cord-cutting fatigue is emerging as streamers raise prices and enter costly disputes with major networks. Meanwhile, Comcast has quietly built a sturdy balance sheet and diversified revenue streams. Its forward price-to-earnings (P/E) ratio of 6.84 is well below the communications industry average (16.5) and far cheaper than major competitors such as The Walt Disney Co. (NYSE: DIS) and AT&T Inc. (NYSE: T). 
Comcast's broadband business is a steady, high-margin cash generator. Despite a 1.4% year-over-year (YOY) slowdown in Connectivity and Platforms revenue in Q3 2025, EBITDA margins for the residential and business segments were 37% and 56%, respectively. The advertising business should also get a boost in 2026 as NBCUniversal holds rights to Super Bowl LX, the FIFA World Cup and the Winter Olympics in Italy. The company generated $4.9 billion in free cash flow in Q3, supporting its 4.4% dividend. Comcast's value story may be gaining wider recognition — the stock is up nearly 10% in the past 30 days — and some technicals point to further upside. Micron: An Essential AI Stock Trading at a Deep Discount How can a stock that returned roughly 200% in 2025 still be considered undervalued? Despite its parabolic year, Micron Technology Inc. (NASDAQ: MU) trades around 29x earnings while the broader tech sector is closer to 75x — a meaningful relative discount. A 29x P/E isn't dirt cheap versus the broader market, but it looks attractive for a company posting 57% YOY quarterly revenue growth, roughly 57% gross margins, and repeatedly raising guidance. 
Memory is a high-margin business, and Micron's management says demand from data centers has been difficult to satisfy. The chart shows a healthy uptrend with support along the 50-day simple moving average (SMA). That aligns with the TradeSmith Health indicator: MU shares are in the Green Zone, signaling a strong trend with healthy pullbacks. Pfizer: Fueling Pipeline Innovation Through Acquisitions Shares of Pfizer Inc. (NYSE: PFE) have struggled since the COVID-19 pandemic waned; the stock is down more than 30% over the past five years. Rivals like Eli Lilly and Co. (NYSE: LLY) have raced ahead thanks to obesity drugs such as Mounjaro, but Pfizer now trades near historical lows in valuation (about 8.4x forward earnings) and is much cheaper than most large-cap pharmaceutical peers. Pfizer's Seagen acquisition is starting to pay off in oncology, having added more than $6 billion in revenue since the deal closed in 2023. 
While Pfizer's pivot into the obesity drug market has been gradual, it has built a promising pipeline by acquiring two smaller drugmakers offering oral and injectable treatment options. The market has largely written Pfizer off in this space, which helps explain the valuation gap. Low expectations can create opportunities: the stock has not fully priced in successful inroads into the GLP-1 market. In addition, Pfizer can serve as a defensive holding thanks to its low valuation and history of dividend growth.
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