A Few Years From Now, You'll Wish You Bought This Undervalued Stock
Buying and holding solid companies with stock trading at attractive valuations for a long time is one of the best ways to make money in the stock market. Adopting this strategy allows investors to capitalize on secular growth trends and disruptive technologies. This is part of why buying shares of Nvidia (NASDAQ: NVDA) right now could turn out to be a smart long-term move.
The company is sitting on huge addressable markets and, but some measures, appears undervalued. Of course, the stock has also more than tripled in value over the past year. That has some wondering if Nvidia stock is overvalued right now. A closer look at Nvidia's pace of growth suggests it is more undervalued overall. Investors might regret not buying this semiconductor giant before it soars higher. Let me explain.
Nvidia's trailing price-to-earnings (P/E) ratio of 70 is admittedly rich and may indicate that it is overvalued, especially when compared to the U.S. tech sector's average P/E ratio of 44.5. But with a forward-earnings multiple of 46, there are strong indications of a big jump coming in its bottom line. That forward P/E is almost in line with the U.S. tech sector's average.
Source Fool.com
