3 New 5-Star Stocks This Week
Sea and Healthpeak Properties are now seen as significantly undervalued.
Every Monday morning, get Morningstar’s insights on company news, the latest stock market trends, and in-depth company reports from our analysts. Sign up for our Stock Strategist newsletter here.
Once a week, we screen the US-listed stocks under Morningstar’s coverage for newly undervalued names—those whose prices have just fallen into ranges worthy of 4- or 5-star Morningstar Ratings. For the week ended Oct. 23, 20 stocks saw their ratings change to 4 stars, while three joined the 68 US-listed names in 5-star territory.
The three new 5-star stocks, ordered by market capitalization, are:
All returns in this article are reported in the stock’s base currency and all data is sourced from Morningstar Direct.
What Is the Morningstar Rating for Stocks?
The Morningstar Rating can help investors identify stocks that are truly undervalued or overvalued, cutting through the market noise. The rating is determined by three factors: a stock’s price, its fair value estimate—Morningstar’s estimate of its intrinsic worth—and its Uncertainty Rating, which captures the range of potential outcomes for that estimate. Stocks rated 4 or 5 stars are considered undervalued, those rated 3 stars are fairly valued, and the ones rated 1 or 2 stars are considered overvalued.
The Latest Stock Valuation Changes
The Morningstar US Total Market Index fell 0.27% over the past week as of Oct. 23, leaving the overall US stock market moderately undervalued, hovering at a 9% discount to its fair value estimate on a market cap-weighted basis.
Of the 872 US-listed stocks covered by Morningstar analysts:
- 42% are undervalued, 40% are fairly valued, and 19% are overvalued.
- 20 are newly undervalued.
- 25 are newly overvalued.
- Three moved from a 4-star rating to a 5-star rating.
- 10 moved from a 5-star rating to a 4-star rating.
- Among the newly undervalued stocks, zero jumped from a 3-star rating to a 5-star rating.
- 31 are no longer undervalued.
Metrics for This Week’s New 5-Star Stocks
Sea SE
- Morningstar Rating: ★★★★★
- Fair Value: $152
- Uncertainty Rating: High
Following a 20.41% loss over the past week, internet retail company Sea saw its Morningstar Rating move to 5 stars from 4. Sea has lost 24.99% over the past three months and 52.24% over the past year. The stock has a narrow economic moat. Sea is trading at a 51% discount to its fair value estimate of $152, with an Uncertainty Rating of High.
Healthpeak Properties DOC
- Morningstar Rating: ★★★★★
- Fair Value: $27.50
- Uncertainty Rating: Medium
Healthcare facilities REIT Healthpeak Properties climbed 1.98% over the past week, bumping its Morningstar Rating to 5 stars from 4. The company’s stock is down 11.46% over the past three months and is up 10.87% over the past year. The stock’s price is 30% below its fair value estimate of $27.50, with an Uncertainty Rating of Medium. The small-core stock has no economic moat.
Albemarle ALB
- Morningstar Rating: ★★★★★
- Fair Value: $200
- Uncertainty Rating: Very High
Specialty chemicals company Albemarle lost 1.90% over the past week, shifting its Morningstar Rating to 5 stars from 4. Albemarle has dropped 19.60% over the past three months and 2.68% over the past year. The stock is trading at a 53% discount to its fair value estimate of $200, with an Uncertainty Rating of Very High. Albemarle is a small-growth company with a narrow economic moat.
This article was generated with the help of automation and reviewed by Morningstar editors. Learn more about Morningstar’s use of automation.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
United States