8 New 5-Star Stocks This Week
Tencent and Sea are now seen as significantly undervalued.
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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
The five new 5-star stocks with the largest market capitalization are:
The full list of new 5-star stocks can be found 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
The Latest Stock Valuation Changes
The Morningstar US Market Index rose 1.08% over the past week as of May 22, leaving the overall US stock market moderately undervalued, hovering at a 6% 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, 36% are fairly valued, and 21% are overvalued.
- 17 are newly undervalued.
- 13 are newly overvalued.
- Eight moved from a 4-star rating to a 5-star rating.
- Six 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.
- 11 are no longer undervalued.
Metrics for This Week’s New 5-Star Stocks
Tencent Holdings
- Morningstar Rating: ★★★★★
- Fair Value Estimate: $102.00
- Uncertainty Rating: High
Following a 3.34% loss over the past week, internet content company Tencent saw its Morningstar Rating move to 5 stars from 4. Tencent has lost 16.63% over the past three months and 13.22% over the past year. The large-core stock has a wide economic moat. Tencent is trading at a 45% discount to its fair value estimate of $102 per share, with an Uncertainty Rating of High.
Sea
- Morningstar Rating: ★★★★★
- Fair Value Estimate: $152.00
- Uncertainty Rating: High
Internet retail company Sea lost 1.09% over the past week, shifting its Morningstar Rating to 5 stars from 4. Sea has dropped 24.11% over the past three months and 45.69% over the past year. The stock is trading at a 43% discount to its fair value estimate of $152 per share, with an Uncertainty Rating of High. Sea has a narrow economic moat.
Ferrovial
- Morningstar Rating: ★★★★★
- Fair Value Estimate: $93.00
- Uncertainty Rating: Low
Engineering and construction company Ferrovial climbed 1.89% over the past week. The company’s stock is down 6.33% over the past three months and is up 32.67% over the past year. The stock’s fair value estimate rose to $93 per share from $75 during the week. It ended the week trading at a 27% discount to its new fair value estimate, with an Uncertainty Rating of Low. The large-growth stock has a wide economic moat.
BioMarin Pharmaceutical
- Morningstar Rating: ★★★★★
- Fair Value Estimate: $90.00
- Uncertainty Rating: High
Following a 4.40% gain over the past week, biotechnology firm BioMarin saw its Morningstar Rating move to 5 stars from 4. BioMarin has lost 15.59% over the past three months and 6.76% over the past year. The small-core stock has a narrow economic moat. BioMarin is trading at a 40% discount to its fair value estimate of $90 per share, with an Uncertainty Rating of High.
Asbury Automotive Group
- Morningstar Rating: ★★★★★
- Fair Value Estimate: $312.00
- Uncertainty Rating: High
Auto and truck dealership Asbury Automotive climbed 4.77% over the past week, bumping its Morningstar Rating to 5 stars from 4. The company’s stock is down 17.00% over the past three months and 17.16% over the past year. The stock’s price is 40% below its fair value estimate of $312 per share, with an Uncertainty Rating of High. The small-value stock has 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.
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