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Further Reading from MarketBeat Media These 3 Stocks Trade at Discounts the Market Won't Ignore ForeverReported by Dan Schmidt. First Published: 1/5/2026. 
Article Highlights - 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, though lower than the gangbusters 25% returns in 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) were higher on the first trading day. If you've ridden the AI rally since the market bottomed in 2022, 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 entered the year trading at about 26x forward earnings, well above its 20-year average of 16x. When valuations are this elevated, investors become ravenous for earnings growth, and high-multiple stocks can fall out of favor quickly if growth slows even a little. If rates remain high, 2026 could be the year value investing stages a comeback. A former U.S. government advisor has released a new briefing examining potential policy developments heading into 2026 and how they could influence markets.
The presentation focuses on historical context, upcoming milestones, and why some analysts believe next year could mark a significant turning point for long-term investors. It's designed to provide perspective and help readers understand what may be unfolding before it becomes widely discussed. View the full briefing here Today we'll look at ways to de-risk a portfolio by investing in stocks that enter the new year undervalued and overlooked. Each company discussed here trades at a substantial valuation discount to its industry average, but both fundamental and technical tailwinds suggest those discounts may not persist much longer. 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 fled expensive cable packages for a la carte streaming services. A lost decade is every investor's nightmare, and CMCSA is about five months shy of that milestone, trading roughly at its May 2016 level. Now, however, customers are showing signs of cord-cutting fatigue as streamers raise prices and clash with major networks, creating an industry tailwind for legacy media owners. Comcast has quietly built a sturdy balance sheet and diversified revenue streams, and its forward price-to-earnings (P/E) ratio of 6.84 is far below the communications industry average (16.5) and well under major competitors like The Walt Disney Co. (NYSE: DIS) and AT&T Inc. (NYSE: T). 
Comcast's broadband business is a steady, high-margin cash-flow engine. Despite Connectivity and Platforms revenue slipping 1.4% year-over-year (YOY) in Q3 2025, EBITDA margins for the residential and business segments were 37% and 56%, respectively. The advertising business should also benefit 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, continuing to support its 4.4% dividend. Comcast's value story may not remain a secret much longer: the stock is up nearly 10% over the past 30 days, and several technical signals point to further upside. Micron: An Essential AI Stock Trading at a Deep Discount How can a stock that posted a roughly 200% return in 2025 still look undervalued? Despite its parabolic 2025 run, Micron Technology Inc. (NASDAQ: MU) remains one of the more attractively priced players tied to the AI boom, trading at about 29x earnings while the broader tech cohort sits nearer 75x. A P/E of 29 isn't a bargain versus the broader market, but it looks compelling for a company delivering 57% YOY quarterly revenue growth, roughly 57% gross margins, and repeatedly raising guidance. 
Memory is a high-margin business, and Micron's management says it has struggled to keep pace with insatiable demand from data centers. The chart shows a healthy uptrend with support along the 50-day simple moving average (SMA). This aligns with the TradeSmith Health indicator: MU shares are in the Green Zone, indicating a strong trend with orderly pullbacks. Pfizer: Fueling Pipeline Innovation Through Acquisitions Shares of healthcare giant Pfizer Inc. (NYSE: PFE) have struggled since the COVID-19 pandemic faded from the forefront; the stock is down more than 30% over the past five years. Rivals like Eli Lilly and Co. (NYSE: LLY) have surged ahead thanks to obesity drugs such as Mounjaro, but Pfizer is trading near historical lows in valuation (about 8.4x forward earnings) and looks inexpensive relative to most large-cap pharmaceutical peers. The company's acquisition of Seagen is starting to contribute meaningfully to the oncology business, adding more than $6 billion in revenue since the deal closed in 2023. 
Pfizer has also been building a presence in the obesity drug market, buying two smaller drugmakers with oral and injectable GLP-1 treatment options. The market has largely written off Pfizer in this space, which helps explain the valuation gap. Low expectations can create opportunity: the stock hasn't yet priced in successful inroads into the GLP-1 market. Additionally, Pfizer remains a defensive option thanks to its low valuation and its history of dividend growth.
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