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This Week's Featured Article These 3 Stocks Trade at Discounts the Market Won't Ignore ForeverBy Dan Schmidt. Publication Date: 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 below the gangbusters 25% returns of 2023 and 2024. AI euphoria remains the dominant market trend as we enter 2026, and the usual suspects like NVIDIA Corp. (NASDAQ: NVDA) and Alphabet Inc. (NASDAQ: GOOGL) were higher on the first day of trading. 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 enters the year trading at about 26x forward earnings — well above its 20-year average of roughly 16x. When valuations sit this high, investors become even more demanding of earnings growth, and high-multiple stocks can fall out of favor quickly if growth slows. If rates remain elevated, 2026 could be the year value investing regains favor. 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 trades at a meaningful valuation discount to its industry peers, 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 hit hard by the cord-cutting wave as customers migrated from expensive cable packages to a la carte streaming services. CMCSA is approaching a decade without price appreciation — it currently trades near the same level it did in May 2016. Now, cord-cutting fatigue appears to be setting in: streamers are raising prices and increasingly getting into costly distribution 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 about 6.8 is well below the communications industry average (16.5) and far cheaper than 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 engine. Although 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. Advertising should also benefit in 2026: NBCUniversal holds the 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 2025, which continues to support its about 4.4% dividend. Comcast's value story may be getting more attention — the stock has risen nearly 10% over the past 30 days, and several technical indicators point to further upside. Micron: An Essential AI Stock Trading at a Deep Discount How can a stock that delivered roughly a 200% gain in 2025 still be considered undervalued? Despite its parabolic run, Micron Technology Inc. (NASDAQ: MU) remains relatively cheap within the AI and semiconductor complex, trading at about 29x forward earnings while the broader tech sector is closer to 75x. While 29x isn't bargain-basement cheap compared with the entire market, it looks attractive for a company posting 57% YOY quarterly revenue growth, roughly 57% gross margins, and repeatedly raising guidance. 
Memory businesses tend to be high-margin, and Micron management says it is struggling to keep up with insatiable demand from data centers. The chart shows a healthy uptrend with support near the 50-day simple moving average (SMA). That technical picture aligns with the TradeSmith Health indicator: MU shares are in the Green Zone, signaling a strong trend with normal, healthy pullbacks. Pfizer: Fueling Pipeline Innovation Through Acquisitions Shares of healthcare giant Pfizer Inc. (NYSE: PFE) have struggled since the COVID-19 pandemic faded; the stock is down more than 30% over the past five years. Peers like Eli Lilly and Co. (NYSE: LLY) have surged past Pfizer on the strength of obesity drugs such as Mounjaro. Yet Pfizer now trades at roughly 8.4x forward earnings — far cheaper than many large-cap pharmaceutical peers. The company's acquisition of Seagen is beginning to bolster its oncology franchise, adding more than $6 billion in revenue since the deal closed in 2023. 
Although Pfizer's pivot into the obesity-drug market has been gradual, the company has strengthened its pipeline by acquiring two smaller drugmakers with oral and injectable treatment candidates. The market has largely written Pfizer off in this area, which helps explain the valuation gap. Low expectations can create opportunities: the stock does not fully reflect the potential for Pfizer to make meaningful inroads in the GLP-1 market. Additionally, Pfizer remains an attractive defensive holding given its low valuation and its history of dividend growth.
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