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This Month's Featured Article These 3 Stocks Trade at Discounts the Market Won't Ignore ForeverReported by Dan Schmidt. Article Published: 1/5/2026. 
What You Need to Know - 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% — the third straight year above historical norms, though lower than the blockbuster 25% returns seen in 2023 and 2024. AI euphoria remains the dominant market theme heading into 2026, and the usual suspects like NVIDIA Corp. (NASDAQ: NVDA) and Alphabet Inc. (NASDAQ: GOOGL) rose 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 sizable gains and may be thinking about diversification, especially if your allocation is tech-heavy. The S&P 500 is entering the year trading at about 26x forward earnings — well above its 20-year average of 16x. When valuations are this elevated, investors demand strong earnings growth, and high-multiple stocks can fall out of favor quickly if growth slows even slightly. If interest rates remain elevated, 2026 could be the year value investing reasserts itself. What If Washington Declared That: YOUR Money ISN'T Actually Yours?
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What does that mean? It means Washington thinks they can seize, freeze, or drain your accounts—whenever they want. Get your free guide now by clicking here >> Below are three ways to de-risk a portfolio by buying companies that enter the new year undervalued and overlooked. Each stock trades at a meaningful discount to its industry average, and a mix of fundamental and technical tailwinds suggests 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 moved away from expensive cable bundles to a la carte streaming services. CMCSA is on track to complete a nearly ten-year stretch without meaningful price appreciation — it is trading around the same level it was in May 2016. That trend may be easing: consumers are showing signs of cord-cutting fatigue, streaming services are raising prices, and carriage disputes with major networks are becoming costlier. Meanwhile, Comcast has quietly built a solid balance sheet and diversified revenue streams. Its forward price-to-earnings (P/E) ratio of 6.84 sits well below the communications industry average (16.5) and beneath major peers 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. While Connectivity and Platforms revenue slowed 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 could get an additional lift in 2026 because 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 catching investors' attention: the stock is up nearly 10% over the last 30 days, and several technical signals point to potential further upside. Micron: An Essential AI Stock Trading at a Deep Discount How can a stock that just delivered a roughly 200% return in 2025 still look undervalued? Despite a parabolic 2025, Micron Technology Inc. (NASDAQ: MU) remains one of the relatively undervalued names in the AI ecosystem, trading around 29x forward earnings while the broader tech sector is nearer to 75x. A P/E of 29 isn't exactly cheap relative to the overall market, but it's attractive for a company producing 57% YOY quarterly revenue growth, roughly 57% gross margins and repeatedly raising guidance. 
Memory businesses are high-margin, and Micron's management says it has struggled to meet insatiable demand from data centers. Technically, the stock is in a healthy uptrend with support near the 50-day simple moving average (SMA). That aligns with the TradeSmith Health indicator — a trend-viability measure — which currently 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 lagged since the COVID-19 pandemic receded; the stock is down more than 30% over the past five years. Competitors such as Eli Lilly and Co. (NYSE: LLY) have outperformed, propelled by obesity drugs like Mounjaro. Meanwhile, Pfizer is trading near historical lows in valuation (about 8.4x forward earnings) and is substantially cheaper than many large-cap pharmaceutical peers. The company's acquisition of Seagen is beginning to pay off in oncology, contributing more than $6 billion in revenue since the deal closed in 2023. 
Pfizer is also making a deliberate push into the obesity-drug market, having acquired two smaller drugmakers with oral and injectable candidates. The market has largely discounted Pfizer's prospects in this space, creating a sizable valuation gap. Low expectations can create opportunities — the stock hasn't fully priced in successful GLP-1 inroads — and Pfizer offers a defensive profile thanks to its low valuation and a long history of dividend growth.
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