1 Underrated Stock That Could Explode

It's no secret. Tech is the winning sector this year. Not only have tech stocks been big drivers behind the S 500's 12.5% gain this year, but the tech-heavy Nasdaq Composite has also obliterated the S 500, delivering a 28% year-to-date return. With such a big run-up in the rearview mirror, many investors are probably wondering where they can look to find good deals. After all, many of the best opportunities in tech from the beginning of the year may be borderline overbought at this point.

Fortunately, there are still a lot of good investment opportunities for investors willing to look beyond tech. One of those opportunities is in the boring industry of furniture. RH (NYSE: RH), which has spent the past decade successfully evolving into a luxury brand, currently trades at an attractive valuation thanks to negative market sentiment toward the housing market. Investors who go against the grain and buy shares today may be rewarded handsomely over the next five to 10 years.

Trading at 19 times earnings, RH's valuation is far more reasonable than many tech companies. Some growth tech stocks, for instance, aren't even profitable yet have market capitalizations in the tens of billions of dollars. Snowflake and , for example, have market caps of about $59 billion and $36 billion, respectively. Yet both companies are still reporting significant annual losses. Snowflake lost $856 million over the trailing 12 months and CrowdStrike's loss for the period came in at $151 million. Meanwhile, RH generated a trailing-12-month net profit of about $370 million yet has a market capitalization of just under $6 billion.

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Source Fool.com