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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 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
—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.
- Among the newly undervalued stocks, zero jumped from a 3-star rating to a 5-star rating.
- 10 are no longer undervalued.
Metrics for This Week’s New 5-Star Stocks
Broadcom AVGO
- Morningstar Rating: ★★★★★
- Fair Value Estimate: $650
- Uncertainty Rating: High
Semiconductor company Broadcom dropped 6.24% over the past week, bumping its Morningstar Rating to 5 stars from 4. The company’s stock is down 10.98% over the past three months and is up 28.16% over the past year. The stock’s price is 43% below its fair value estimate of $650, with an Uncertainty Rating of High. The large-growth stock has a wide economic moat.
Vivmark Residential VMRK
- Morningstar Rating: ★★★★★
- Fair Value Estimate: $225
- Uncertainty Rating: Medium
Residential REIT Vivmark Residential was flat over the past week. Vivmark Residential has climbed 0.92% over the past three months and 0.48% over the past year. The stock’s fair value estimate rose to $225 from $79.13 during the week. It ended the week trading at a 71% discount to its new fair value estimate, with an Uncertainty Rating of Medium. Vivmark Residential is a mid-core company with no economic moat.
Bilibili BILI
- Morningstar Rating: ★★★★★
- Fair Value Estimate: $36
- Uncertainty Rating: Very High
Following a 2.18% loss over the past week, internet content company Bilibili saw its Morningstar Rating move to 5 stars from 4. Bilibili has lost 2.96% over the past three months and 28.20% over the past year. The large-core stock has no economic moat. Bilibili is trading at a 53% discount to its fair value estimate of $36, with an Uncertainty Rating of Very High.
ESAB ESAB
- Morningstar Rating: ★★★★★
- Fair Value Estimate: $121
- Uncertainty Rating: Medium
Metal fabrication firm ESAB dropped 4.02% over the past week, bumping its Morningstar Rating to 5 stars from 4. The company’s stock is down 10.61% over the past three months and 26.98% over the past year. The stock’s price is 33% below its fair value estimate of $121, with an Uncertainty Rating of Medium. The small-core stock has a narrow economic moat.
Vontier VNT
- Morningstar Rating: ★★★★★
- Fair Value Estimate: $48
- Uncertainty Rating: Medium
Technical instruments company Vontier gained 0.43% over the past week, shifting its Morningstar Rating to 5 stars from 4. Vontier has climbed 14.14% over the past three months and has dropped 21.78% over the past year. The stock is trading at a 31% discount to its fair value estimate of $48, with an Uncertainty Rating of Medium. Vontier is a small-value 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.
