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Further Reading from MarketBeat.com These 3 Stocks Trade at Discounts the Market Won't Ignore ForeverAuthor: Dan Schmidt. Posted: 1/5/2026. 
Summary - 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 wrapped up 2025 with a total return of about 18% — the third straight year above historical norms, although below the gangbuster 25% returns of 2023 and 2024. AI euphoria remains the dominant market theme entering 2026, and the usual suspects like NVIDIA Corp. (NASDAQ: NVDA) and Alphabet Inc. (NASDAQ: GOOGL) pushed higher again on the first trading day. If you've ridden the AI rally since the 2022 market bottom, you're likely sitting on substantial gains and may be looking to diversify, especially with 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 more earnings growth, and high-multiple stocks can fall out of favor quickly if growth decelerates. If interest rates stay high, 2026 could be a year when value investing regains favor. Wall Street veteran reveals #1 investment trend of 2026 (not AI)
Will you potentially make money or lose money in the U.S. stock market in 2026? According to the 50-year Wall Street legend who invented one of Wall Street's most popular buying and selling indicators – the answer has nothing to do with AI, quantum computing, or cryptos. Instead, it all comes down to the #1 stock he recommends you BUY now… And the #1 stock he recommends you SELL now. Below are three ways to de-risk a portfolio by adding stocks that enter the new year undervalued and overlooked. Each company trades at a meaningful discount to its industry average, yet fundamental and technical tailwinds suggest those discounts may not last. 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 abandoned expensive cable packages for a la carte streaming services. CMCSA is roughly five months away from completing a "lost decade," trading near the same price it did in May 2016. Now, however, customers are showing cord-cutting fatigue: streamers are raising prices and engaging in costly disputes with major networks. Meanwhile, Comcast has quietly built a strong 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 undercuts major competitors like The Walt Disney Co. (NYSE: DIS) and AT&T Inc. (NYSE: T). 
Comcast's broadband business remains a steady, high-margin cash-flow generator. Despite Connectivity and Platforms revenue declining 1.4% year-over-year in Q3 2025, the residential and business segments posted EBITDA margins of 37% and 56%, respectively. NBCUniversal's advertising business also stands to benefit in 2026, with 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, helping to support its 4.4% dividend. Comcast's value story may not remain a secret: the stock is up nearly 10% in the past 30 days, and several technical indicators suggest further upside could be ahead. Micron: An Essential AI Stock Trading at a Deep Discount How can a stock that finished 2025 up roughly 200% still look undervalued? Despite a parabolic 2025, Micron Technology Inc. (NASDAQ: MU) remains one of the more reasonably valued players tied to the AI cycle, trading around 29x earnings while the broader tech sector sits near 75x. A P/E of 29 isn't cheap relative to the entire market, but it looks compelling for a company posting roughly 57% year-over-year revenue growth, about 57% gross margin and repeated upward guidance revisions. 
Memory chips are high-margin products, and Micron's management says the company is struggling to keep up with demand from data centers. The chart shows a healthy uptrend with support near the 50-day simple moving average. That aligns with the TradeSmith Health indicator: MU shares are in the Green Zone, signaling a robust trend with normal pullbacks. Pfizer: Fueling Pipeline Innovation Through Acquisitions Shares of healthcare giant Pfizer Inc. (NYSE: PFE) have struggled since the COVID-19 pandemic receded from the forefront; the stock is down more than 30% over the past five years. Rival drugmakers such as Eli Lilly and Co. (NYSE: LLY) have outpaced Pfizer thanks to obesity drugs like Mounjaro, but Pfizer now trades near historical lows (about 8.4x forward earnings) and is cheaper than most large-cap pharmaceutical peers. Its acquisition of Seagen is beginning to contribute meaningfully to oncology revenue, adding more than $6 billion in revenue since the deal closed in 2023. 
Although Pfizer was slow to pivot into the growing obesity-drug market, it has bolstered its pipeline by acquiring two smaller drugmakers with oral and injectable treatment candidates. The market has largely written Pfizer off in this space, creating a wide valuation gap. Low expectations can create opportunities: the stock doesn't fully price in successful inroads into the GLP-1 market. Additionally, Pfizer can serve as a defensive holding given its low valuation and its history of dividend growth.
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