Undervalued Stocks Amid Expensive S&P 500: Alibaba, Altria, and Carnival
The S&P 500's lofty valuation at 31 times earnings masks opportunities in smaller, undervalued stocks. Three names stand out for investors willing to look beyond the index: Alibaba, Altria, and Carnival.
Alibaba trades at a steep discount to its 2020 highs, with next-year EBITDA multiples at just 11x. Regulatory crackdowns and economic headwinds in China have pressured its e-commerce and cloud businesses, but the company is pivoting to cross-border and overseas expansion.
Market participants ignoring these discounted equities may be missing contrarian opportunities. While macroeconomic concerns persist, valuations now price in significant pessimism.