We recently published a list of 10 Ridiculously Cheap Stocks to Buy Right Now. In this article, we are going to take a look at where Itaú Unibanco Holding S.A. (NYSE:ITUB) stands against other ridiculously cheap stocks to buy right now.
The Market is Not Cheap Right Now, Strategist Says
The S&P 500 is currently trading at 23 times its forward earnings, indicative that the market is really expensive at the moment. On November 14, Alan McKnight, CIO at Regions Wealth Management, joined CNBC to share his stance on the market and his expectations moving forward.
McKnight agrees that the market is not cheap at the moment, however, this does not mean that investors halt buying. In fact, investors should continue to invest but be wary about volatility. He adds that opportunities are coming up as we head into 2025. McKnight shares that with the expectations from the economy, investors must consider broadening their portfolios. He also remains positive on small and mid-cap stocks.
READ ALSO: 10 AI News Updates You Can’t Miss This Weekend and 14 AI Stocks on Wall Street’s Radar.
The Tariff Debate and Its Impact on Investment Strategy
Presidential elections have adjourned, and with that, new questions on the investment outlook have emerged. Investors are curious to see how the proposed tariffs on Chinese goods and all other imports impact the way markets behave moving forward. On November 22, Jeffrey Kleintop, chief global investment strategist at Charles Schwab, joined Rachelle Akuffo on Yahoo Finance to share his expectations of the market and the investment outlook for the new presidential term.
Kleintop shares that the combined tariff claims by the newly elected government would bring the weighted average US tariff to 26%, significantly higher than its current state. He adds that while there is “reason for concern” investors do not need to make significant changes to their portfolios. He also states that currencies adjust with tariffs all the time, and since the dollar is already up by 5%, much of the impact has been mitigated.
Adding to the notion of risk mitigation, Kleintop suggests that diversification, away from popular themes in the United States, is crucial at the moment. Currently, tech and artificial intelligence hold dominance in the market, and investors must consider spreading to other avenues. He also shares that anywhere outside the United States, financials are performing extremely well and expects international stocks to grow moving forward. He adds that Europe is a bright spot where we might see an acceleration in earnings growth and price-to-earnings ratios.
He also acknowledges that AI has the potential to improve productivity, especially in areas that have been “lagging,” and shares he is interested to see how the AI market turns out. While most strategists and analysts are bullish on AI, stocks in this sector are particularly expensive relative to value stocks. That said, let’s take a look at the 10 ridiculously cheap stocks to buy right now.
Our Methodology
To come up with the 10 ridiculously cheap stocks to buy right now, we used the Finviz Stock Screener. We set the forward P/E to 8 and under and market capitalization to $2 billion and above. We then shortlisted the top 30 names and sourced their forward P/E from Seeking Alpha and market capitalization from Yahoo Finance. We then ranked them in ascending order of the analyst upside as of November 25, 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An executive in a suit walking through a lobby of *Regional Bank* building.
Itaú Unibanco Holding S.A. (NYSE:ITUB)
Analyst Upside as of November 25, 2024: 28%
Forward P/E as of November 25, 2024: 7.36
Market Capitalization as of November 25, 2024: $53.7 Billion
Itaú Unibanco Holding S.A. (NYSE:ITUB) is a financial services company that ranks sixth on our list of ridiculously cheap stocks to buy right now. The company is headquartered in Brazil and has more than 70 million clients. The company provides corporate and investing banking, private banking, asset management, and retail business services to customers in 18 countries.
The full-service commercial bank offers discounts, promotions, and exclusive deals for clients every day. The company has a 100-year legacy that is still carrying momentum today. In the third quarter of 2024, Itaú Unibanco Holding S.A. (NYSE:ITUB) generated R$42.7 billion ($7.33 billion) in revenue.
On the customer front, Itaú Unibanco (NYSE:ITUB) has been working to improve its presence digitally. In September, the company launched an update to its Superapp. The new update includes a Security Hub, bringing together all the information against scams and financial fraud. To expand on its data-driven growth strategy, the company now has over 430 data scientists, more than 360 initiatives using generative artificial intelligence, 60 plus machine learning engineers, and over 1,000 AI models currently in use.
Overall, Itaú Unibanco Holding S.A. (NYSE:ITUB) is a prominent name in the financial services industry and we say that because of its dominance in the industry and growing use of technology. Analysts are also bullish on the stock and their median price target represents an upside of 28% from current levels.
Ariel Investments’ Ariel Global Strategy made the following comment about Itaú Unibanco Holding S.A. (NYSE:ITUB) in its Q4 2022 investor letter:
“We initiated two new positions in the quarter. Macro-uncertainty also presented us an opportunity to buy shares of Brazilian financial services company, Itaú Unibanco Holding S.A. (NYSE:ITUB). The company is led by a dynamic CEO, who is utilizing technology in the private banking sector as part of a broader move towards digitization. This strategy is not only reducing distribution costs, but is enabling the creation of new products in high market share areas such as private banking, credit cards, as well as small- and medium-size business lending. An attractive valuation, strong net interest margins and high return on equity are among the attributes motivating our purchase of shares.”
Overall, ITUB ranks 6th on our list of ridiculously cheap stocks to buy right now. While we acknowledge the potential of ITUB to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ITUB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.