5 Undervalued Stocks That Crushed Earnings

Plus: Why Vanguard is optimistic about the outlook, undervalued biotech stocks and when Morningstar thinks the Fed will cut rates. [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_smartinvestor&utm_content=45284&elqTrackId=fda835fb7e444c26a19afb27a0d8ffd2&elq=a8868aa7e4c64e16b00c5242839e7d2d&elqaid=45284&elqat=1&elqCampaignId=22081) [Smart Investor] Smart Investor [Tom Lauricella, chief markets editor]( Connect with Tom on [LinkedIn]( [Tom Lauricella] In this newsletter: - [5 Stocks That Crushed Earnings in Q1 2023]( - [Why Vanguard Sees a Brighter Outlook for Investors’ Portfolios]( - [7 Undervalued Biotech Stocks]( - [Stocks From Companies Generating High Cash Flow]( - [When Will the Fed Start Cutting Interest Rates?]( Although stocks are creeping back to their highs of the year, there’s not much momentum or optimism in the market. On the one hand, that’s understandable. Worries about a recession, dramatic headlines about [the debt ceiling impasse]( and lingering bruises from 2022 appear to have wrung the euphoria out of investors. But there’s actually some good news out there for your portfolio. Admittedly, it’s not necessarily from the stock side of the house. Instead, as [we’ve been writing about,]( higher bond yields have become an investor’s new best friend–for now at least. In this week’s [Markets Brief]( we dig into how bonds are central to the potential good news in Vanguard’s long-term investment return forecasts. In the background, the debate is still raging about the economic outlook, especially with inflation still running hot and another strong jobs report likely in the coming week. This week, Morningstar’s senior U.S. economist Preston Caldwell came out with his latest predictions on whether the [United States will slide into recession]( and when the [Fed will start cutting interest rates](. Another aspect of the new investing landscape that [we have been exploring]( is the emphasis on companies with strong cash flows. This may seem wonky, but the concept is simple: In a tougher economic environment, it’s good to own stocks that generate tons of cash. This week Sandy Ward [screens for seven stocks]( that have solid balance sheets and whose businesses haul in cash, including Broadcom and Bristol-Meyers Squibb. We’ve got two other great stock screens this week. The first is our quarterly look at [stocks that knocked it out of the park]( during earnings season but are still cheap according to Morningstar analysts. And in our Friday stock screen, we revisit [biotech stocks]( and come up with seven undervalued names. Lastly, as earnings season winds down, we’re checking in on how some big names are looking, including whether [Disney]( [Ford]( and [Uber]( are buys after their earnings reports. As always, you can find all our markets coverage [here]( along with our new live U.S. stock market report that offers up an easy way to keep up to date on what’s happening during the trading day. [5 Stocks that Crushed First Quarter Earnings]( [5 Stocks that Crushed First Quarter Earnings]( Citigroup and DoorDash are among those that are still cheap despite impressive earnings beats. Jakir Hossain [Read More]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] Markets and the Economy [Why Vanguard Sees a Brighter Outlook for Investors’ Portfolios]( [Why Vanguard Sees a Brighter Outlook for Investors’ Portfolios]( While stock valuations are stretched, higher bond yields make for better return expectations. Tom Lauricella, Jakir Hossain [7 Stocks From Companies Generating High Cash Flow]( [7 Stocks From Companies Generating High Cash Flow]( Broadcom and Bristol-Meyers Squibb are among the high-quality stocks with strong operating performance and manageable debt. Sandy Ward [Bond Funds Turn to Quality as Yields Rise and Concerns Grow]( [Bond Funds Turn to Quality as Yields Rise and Concerns Grow]( A rare opportunity for managers to add income while minimizing risk. Sam Kulahan [Microsoft and AI: Believe the Hype?]( [Microsoft and AI: Believe the Hype?]( The company is an early leader in the artificial intelligence race; here’s what that may mean for Microsoft stock. Dan Romanoff [When Will the Fed Start Cutting Interest Rates?]( [When Will the Fed Start Cutting Interest Rates?]( Our latest economic forecast for interest rates, inflation, and GDP growth. Preston Caldwell [Our Ultimate Stock-Pickers’ Top 10 High-Conviction and New-Money Purchases]( [Our Ultimate Stock-Pickers’ Top 10 High-Conviction and New-Money Purchases]( Several funds see value in financial services and healthcare. Ari Felhandler [The Ultimate Buy and Hold Portfolio]( [The Ultimate Buy and Hold Portfolio]( Would stashing away 1986′s stock-market leaders have been a sound investment strategy? John Rekenthaler [10 Best Growth Stocks to Buy for the Long Term]( [10 Best Growth Stocks to Buy for the Long Term]( The stocks of these high-quality growth companies look undervalued today. Susan Dziubinski [Does the Apple Savings Account Live Up to the Hype?]( [Does the Apple Savings Account Live Up to the Hype?]( How it works and what it yields. Amy C. Arnott [6 Top-Performing Large-Growth Funds]( [6 Top-Performing Large-Growth Funds]( These funds have delivered for investors through a difficult market for large-growth stocks. Sadhika Thapa [Is Ford Stock a Buy After Earnings?]( [Is Ford Stock a Buy After Earnings?]( It’s a question of weighing the automaker’s 5% dividend against its struggles with costs and a possible recession. David Whiston [Is Disney Stock a Buy After Earnings?]( [Is Disney Stock a Buy After Earnings?]( With losses in its direct-to-consumer segment but Hulu integration on the way, here’s what we think of Disney stock. [Is Occidental a Buy, a Sell, or Fairly Valued After Earnings?]( [Is Occidental a Buy, a Sell, or Fairly Valued After Earnings?]( With an improved long-term outlook, here’s what we think of Occidental’s stock. Margaret Guidici [4 Cheap, Moaty Companies Working on the Energy Transition]( [4 Cheap, Moaty Companies Working on the Energy Transition]( Why Infineon, STMicroelectronics, Albemarle, and Livent are worth a look. Leslie Norton [Have Index Funds Become Growth Funds?]( [Have Index Funds Become Growth Funds?]( Assessing the influence of today’s technology giants. John Rekenthaler Chart of the Week [We Expect Economic Growth to Weaken Until Fed Pivots to Rate Cuts]( [We Expect Economic Growth to Weaken Until Fed Pivots to Rate Cuts]( But the economy should remain resilient to banking sector distress. Preston Caldwell [Read More]( Share: [facebook]( [twitter]( [linkedin]( Earnings [Nvidia Earnings: ChatGPT-Led Data Center Growth Acceleration Drives a 50% Fair Value Increase]( Raising the fair value estimate on Nvidia stock to $300. Abhinav Davuluri [Kohl’s Earnings: Fair Start to 2023 Creates Confidence in Value Creation Plans]( No change to our $50 fair value estimate for Kohl’s stock; shares extremely undervalued. David Swartz [Palo Alto Networks Earnings: Strong Results Amid a Challenging Macro Environment]( Upping our fair value estimate for Palo Alto Networks stock to $225 from $200; shares marginally undervalued. Malik Ahmed Khan [Lowe’s Earnings: Weather and Macro Environment Impair Sales, but Solid Execution on Display]( We plan to lower our fair value estimate on Lowe’s stock from $218; shares fully valued. Jaime M. Katz Listen Now Get the latest investing insights and market updates with [Morningstar’s podcasts]( available on your iPhone, iPad, Android, PC, or smart speaker. Stay connected: [twitter]( [facebook]( [linkedin]( [instagram]( [YouTube]( [Apple News]( [View online]( | [See all newsletters]( | [Share your feedback]( [Unsubscribe]( from this newsletter. Or update your [email preferences](. © 2023 Morningstar, Inc. All Rights Reserved. 22 W. Washington St. Chicago, IL 60602