My task today is to find seven of the most undervalued long-term stocks to buy now.
We need to determine two things before stock selection takes place. First, it’s important to define what is meant by long-term. Secondly, we need to classify what makes a stock undervalued.
For me, long-term is three years, at a minimum, and probably more like five to 10. As for undervalued, I will select stocks with a high return on invested capital (ROIC ) and high earnings yields. For those who follow Joel Greenblatt, I’m using his Magic Formula to keep it simple.
Each of the stocks on my list will have a market capitalization of at least $500 million. Further, I’ll make sure that I’m selecting stocks from at least five sectors.
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