4 Undervalued Stocks to Buy

Don't Miss Out on These Summer Deals


Since the start of June, the Dow is off 3.5%, and bargain hunters are on the prowl. They know that stocks are undervalued and they don't want to miss out on a good deal.

What most investors don't realize about declining markets is that some stocks get hit for a good reason. In other words, not all stocks that go down are bargains.

However, there are some truly undervalued stocks out there. The trick is being able to tell the difference. I recently gave you a list of 8 False Bargain Stocks . Now I want to give you a list of undervalued stocks to buy. These stocks have bent in the market storm, but they are not breaking. And these undervalued stocks represent some of the finest buys on the market today.

Undervalued Stock to Buy #1 - Carbo Ceramics (CRR)

Carbo Ceramics (NYSE: CRR)

Carbo Ceramics (NYSE: CRR ) helps boost the output for natural gas and oil wells, which is what every energy company wants to do right now.

In the most recent quarter, the company logged a profit of $30.6 million, or $1.30 per share, up from its first-quarter profit of $19 million, or 82 cents per share, in 2010. Analysts had been expecting earnings of $1.02 per share, resulting in a 27% earnings surprise. CRR's revenues increased to $150.8 million from $123.5 million and flew past estimates of $129.5 million.

This is a company that's using the market to its advantage and even though it is trading north of $145, it is still an excellent bargain this summer.

Undervalued Stock to Buy #2 - Edwards Lifesciences Corp. (EW)

Edwards Lifesciences Corp. (NYSE: EW)

Medical device company Edwards Lifesciences Corp. (NYSE: EW ) is the world's largest creator of artificial heart valves, including valves made from animal tissue and annuloplasty rings that repair damaged valves. Other major products include heart monitoring systems, various types of surgical tubes and catheters.

In the first quarter, sales rose 19% to $404.5 million. Net earnings jumped 33% compared with the first quarter of 2010 to $63.9 million, while adjusted earnings reached 51 cents per share. Earnings came in well above the analyst expected EPS of 42 cents, which gives the company a 21% earnings surprise!

After the successful quarter, Edwards Lifesciences has increased its 2011 earnings forecast. Sales are expected to be in the $1.66 billion to $1.74 billion range, while its expected EPS has been raised to $2.01 to $2.07 for the year. At around $86.50, this is an undervalued stock.

Undervalued Stock to Buy #3 - Deere & Company (DE)

Deere logo

When it comes to construction equipment, there's only one company to own right now: Deere & Company (NYSE: DE ). DE is the world's largest farm equipment manufacturer and a leading producer of construction, forestry, and commercial and residential lawn care equipment. If you have ever seen a tractor, you probably recognize the signature John Deere green color or know the company's "Nothing runs like a Deere" slogan.

In the most recent quarter, Deere's sales increased 25% to $8.9 million compared with $7.1 billion in the same period last year. Earnings jumped from $1.28 per share in the second fiscal quarter of 2010 to $2.12 per share last quarter. That's a 65% increase! Analysts expected the company to make revenue of $8.14 billion and earnings of $2.06 per share, so Deere posted a 9% sales surprise and 3% earnings surprise. The company also raised its full-year forecast. It now expects sales to rise 21% to 23% compared with a previous guidance of 18% to 20% increase.

Deere is also continuing its massive expansion efforts. The company announced a new plan to invest $80 million in building a new equipment plant in China to help meet the strong demand in the regions. With the demand for crops and crop prices maintaining high levels, Deere is a great undervalued stock to buy this summer. It closed yesterday at $82.

Undervalued Stock to Buy #4 - Avago Technologies Ltd. (AVGO)

Avago Technologies Ltd. (NASDAQ: AVGO)

Avago Technologies Ltd. (NASDAQ: AVGO ) is an integrated-circuit semiconductor company. For three decades it was a part of Hewlett-Packard (NYSE: HPQ ), and then it was spun off together with the whole HP semiconductor business as part of Agilent Technologies (NYSE: A ). As part of HP's semiconductor business, Avago assembled a team of over 1,000 design and product engineers and developed an extensive portfolio of intellectual property plans that currently include more than 5,000 U.S. and foreign patents and patent applications. Avago operates design centers in Asia, Europe and the United States, and manufacturing facilities primarily in Asia. About 80% of its sales come from outside the United States, which is creating an excellent tailwind for the company as the U.S. dollar is back on the decline.

Recent earnings showed a net profit of $119 million, or 48 cents per share, up from 2009′s profit of $38 million, or 16 cents per share, in the year ago quarter. Excluding items and charges, net profit was 65 cents per share, up from 36 cents per share in the previous year and ahead of the consensus estimate of 57 cents per share by 14%. This undervalued stock currently trades just above $34.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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