The economy is picking up as we speak. Unemployment currently sits at , close to pre-pandemic levels. Interestingly, sectors that faced significant workforce and profitability issues during the pandemic, such as healthcare, are more profitable than pre-pandemic levels. Additionally, jobs eliminated during the pandemic have from growth across other business verticals. For instance, the healthcare sector is experiencing job growth with innovations through SaaS verticals with the advent of apps and platforms. All of this culminates in a growing economy for the future, giving reason for investors reason to consider underdog stocks.
In modern media, it’s a common trope to create storylines around the underdog when the odds seem impossible. But what if the odds were actually in the underdog’s favor with the support of macroeconomic tailwinds? Here are three underdog stocks that I believe all investors should consider for July.
United Airlines (UAL)
United Airlines (NASDAQ:UAL) is a major American airline providing international and domestic air transportation. The company has shown continued growth, making it an intriguing stock.
Continuing its recovery from the pandemic, United boasted a revenue of $12.54 billion in its Q1 earnings call, beating expectations from analysts by $144.8 million paired with a . The company demonstrates positive market sentiment with a 3M price performance of 8.82%. When compared to the sector median 3M , UAL showcases strong momentum within the airline industry.
United’s investment in fleet updates and expansion of transatlantic routes for 2024 are a big contributor to its growing value. The airline announced its plans to introduce nearly , capturing the increased demand for international travel. With the economy on the mend and growing , international travel will be in higher demand, with high potential to increase UAL stock value. Additionally, the company’s MileagePlus program with has contributed to United’s steady revenue stream. This subscriber base strengthens financial security through recurring revenue. Moreover, Wall Street analysts believe that United Airlines is a strong buy with a . Thus, United Airlines is one of the underdog stocks worth buying.
General Motors (GM)
General Motors (NYSE:GM) is a multinational automotive manufacturing company that designs and markets cars and vehicle parts. The company’s recent business ventures led it to have its in more than three years.
General Motors surprised analysts with a Q1 earning call of $43.01 billion, surpassing expectations by . This performance is supported by the company’s YOY increase in EPS by 7.58%, as well as a remarkable trailing twelve months P/E ratio of 5.78, significantly lower than the sector median of 14.25.
In May 2024, the company achieved , defying the market wide EV sales. GM is also currently on track to reach annual EV production of by the end of 2025, demonstrating its commitment to EVs. Additionally, GM recently partnered with LG Energy Solution, a battery manufacturing company, to secure a deal involving the construction of a in Tennessee. Not only does this help GM achieve EV production goals, but it also brings it one step closer to its future goal of full model line . General Motors is with a 26.60% increase for the current year, making it one of the underdog stocks worth looking into.
CVS Health (CVS)
CVS Health (NYSE:CVS) is a healthcare company that serves the customers as a retail pharmacy chain. The company has fallen 29.97% YTD, putting it at an attractive price point. reports 24 analysts predicting a 1-year price range on CVS between $59.00 and $87.00, with a mean of $67.10.
CVS has solid financials, with weak profitability being the main concern for the stock. The company reports remaining steadfast in revenue. Profitability has worsened with net profit margins decreasing 49.83% YOY. Conversely, CVS demonstrates its ability to grow shareholder value beyond expectations. The company does so through its current and a .
CVS has issued a statement that it could lose up to next year. While this loss of customer base may seem daunting, it is to solve the main issue it faces: profitability. With “the goal next year being margin,” reducing the Medicare program services is the best form of action. The company reported being $900 million short of its profitability goal, with $400 million of that being attributed to Medicare member services. With its plan to improve profitability giving it a positive future, CVS is one of the underdog stocks to buy.
On the date of publication, Matthew Rodrigues did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.
