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Further Reading from MarketBeat Media These 3 Stocks Trade at Discounts the Market Won't Ignore ForeverBy Dan Schmidt. Article Posted: 1/5/2026. 
Key Takeaways - 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 below the gangbusters 25% returns of 2023 and 2024. AI euphoria remains the dominant market trend entering 2026, and the usual suspects like NVIDIA Corp. (NASDAQ: NVDA) and Alphabet Inc. (NASDAQ: GOOGL) were higher again on the first trading day of the year. 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 your allocation is tech-heavy. The S&P 500 is entering the year trading at roughly 26x forward earnings, well above its 20-year average of about 16x. When valuations are this elevated, investors become ravenous for earnings growth, and high-multiple stocks can fall out of favor quickly if growth even slightly disappoints. If interest rates remain high, 2026 could be the year value investing stages a comeback. A free report revealing the 7 key indicators that have predicted every major economic collapse since 1929.
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These aren't the signals you'll see on CNBC. Claim Your Free Report Now » Below are three ways to de-risk a portfolio by adding stocks that enter the new year undervalued and overlooked. Each company discussed trades at a meaningful valuation discount to its industry average, yet both 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 from expensive cable bundles to a la carte streaming services. A lost decade is every investor's nightmare: CMCSA is roughly five months from completing that milestone, trading near the same price it was in May 2016. Now, cord‑cutting fatigue is setting in as streamers raise prices and face costly carriage disputes with major networks. At the same time Comcast has quietly built a durable balance sheet and diversified revenue streams. Its forward price‑to‑earnings (P/E) ratio of about 6.84 sits well below the communications industry average (16.5) and far beneath major peers such as The Walt Disney Co. (NYSE: DIS) and AT&T Inc. (NYSE: T). 
Comcast's broadband business remains a steady, high‑margin cash generator. Although Connectivity and Platforms revenue slowed 1.4% year‑over‑year in Q3 2025, EBITDA margins in the residential and business segments were 37% and 56%, respectively. Advertising should get a lift 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, which helps support its 4.4% dividend. Comcast's value story may be getting noticed: the stock is up nearly 10% over the past 30 days, and some technical indicators hint at further upside. Micron: An Essential AI Stock Trading at a Deep Discount How can a stock that just posted a roughly 200% year still be considered undervalued? Even after its parabolic 2025 run, Micron Technology Inc. (NASDAQ: MU) looks inexpensive relative to many AI and tech peers. Micron trades at about 29x forward earnings while the broader tech sector is near 75x. A 29x P/E isn't bargain basement relative to the whole market, but it's compelling for a company delivering rapid growth: Micron recently reported roughly 57% year‑over‑year quarterly revenue growth, 57% gross margins, and has repeatedly raised guidance. 
Memory businesses are high‑margin, and Micron's management says demand from data centers remains insatiable. The chart shows a healthy uptrend with support around the 50‑day simple moving average (SMA), and TradeSmith's Health indicator places MU shares in the Green Zone, signaling a strong 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; the stock is down more than 30% over the past five years. Rivals like Eli Lilly and Co. (NYSE: LLY) have surged ahead on obesity treatments such as Mounjaro, yet Pfizer now trades near historical valuation lows (about 8.4x forward earnings) and looks inexpensive versus most large‑cap pharmaceutical peers. Pfizer's acquisition of Seagen is starting to pay off in oncology, contributing more than $6 billion in revenue since the deal closed in 2023. 
While Pfizer's pivot into the obesity drug market has been gradual, recent acquisitions have bolstered its pipeline with both oral and injectable candidates. The market has largely written Pfizer off in this area, which helps explain the wide valuation gap. Low expectations can create opportunity: the stock doesn't yet reflect meaningful success in the GLP‑1 market. Additionally, Pfizer can serve as a defensive holding given its low valuation and history of dividend growth.
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