22 New 4-Star Stocks This Week

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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

. For the week ended Aug. 21, 22 stocks saw their ratings change to 4 stars, while five joined the 51 US-listed names in 5-star territory

The five new 4-star stocks with the largest market capitalization are:

• Amazon AMZN
• UnitedHealth Group UNH
• Texas Instruments TXN
• Arista Networks ANET
• Analog Devices ADI

The full list of new 4-star stocks is at the bottom of this story. 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

—Morningstar’s estimate of its intrinsic worth—and its , 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 1.44% over the past week as of Aug. 21, leaving the overall US stock market moderately undervalued, hovering at a 7% discount to its fair value estimate on a market cap-weighted basis.

Of the 879 US-listed stocks covered by Morningstar analysts:

• 34% are undervalued, 44% are fairly valued, and 22% are overvalued.
• 22 are newly undervalued.
• Seven are newly overvalued.
• Five moved from a 4-star rating to a 5-star rating.
• Five moved from a 5-star rating to a 4-star rating.
• None of the newly undervalued stocks jumped from a 3-star rating to a 5-star rating.
• 10 are no longer undervalued.

Metrics for This Week’s New 4-Star Stocks

Amazon AMZN

• Morningstar Rating: ★★★★
• Fair Value Estimate: $300.00
• Uncertainty Rating: Medium

Internet retail company Amazon dropped 1.53% over the past week, bumping its Morningstar Rating to 4 stars from 3. The company’s stock is down 3.66% over the past three months and is up 16.53% over the past year. The stock’s price is 14% below its fair value estimate of $300 per share, with an Uncertainty Rating of Medium. The large-core stock has a wide economic moat.

UnitedHealth Group UNH

• Morningstar Rating: ★★★★
• Fair Value Estimate: $475.00
• Uncertainty Rating: High

Following a 2.89% loss over the past week, healthcare plans company UnitedHealth saw its Morningstar Rating move to 4 stars from 3. UnitedHealth has gained 2.57% over the past three months and 32.05% over the past year. The large-value stock has a narrow economic moat. UnitedHealth is trading at an 18% discount to its fair value estimate of $475 per share, with an Uncertainty Rating of High.

Texas Instruments TXN

• Morningstar Rating: ★★★★
• Fair Value Estimate: $325.00
• Uncertainty Rating: High

Semiconductor company Texas Instruments dropped 5.44% over the past week, bumping its Morningstar Rating to 4 stars from 3. The company’s stock is down 10.95% over the past three months and is up 35.11% over the past year. The stock’s price is 19% below its fair value estimate of $325 per share, with an Uncertainty Rating of High. The large-core stock has a wide economic moat.

Arista Networks ANET

• Morningstar Rating: ★★★★
• Fair Value Estimate: $230.00
• Uncertainty Rating: High

Following a 5.12% loss over the past week, computer hardware company Arista saw its Morningstar Rating move to 4 stars from 3. Arista has gained 26.96% over the past three months and 42.88% over the past year. The large-growth stock has a wide economic moat. Arista is trading at an 18% discount to its fair value estimate of $230 per share, with an Uncertainty Rating of High.

Analog Devices ADI

• Morningstar Rating: ★★★★
• Fair Value Estimate: $445.00
• Uncertainty Rating: High

Semiconductor company Analog Devices lost 4.19% over the past week. Analog Devices has dropped 2.64% over the past three months and has climbed 53.11% over the past year. The stock’s fair value estimate rose to $445 per share from $380 during the week. It ended the week trading at a 16% discount to its new fair value estimate, with an Uncertainty Rating of High. Analog Devices is a large-growth company with a wide economic moat.