7 Most Undervalued Foreign Stocks to Buy According to Analysts

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1) Honda Motor Co., Ltd. (NYSE:HMC)

Forward P/E Ratio as of 10 October: 6.61x          

Average Upside Potential: 29.10%

Number of Hedge Fund Holders: 12

Honda Motor Co., Ltd. (NYSE:HMC) is engaged in developing, manufacturing, and distributing motorcycles, automobiles, power, and other products in Japan and other countries.

Wall Street experts opine that Honda Motor Co., Ltd. (NYSE:HMC)’s operating profit margins are expected to be aided by the growth potential of its emerging market (EM) motorcycle and HEV operations. Moreover, the company’s strategy of vertical integration, primarily in the development of batteries and software crucial for competitiveness in the battery electric vehicle (BEV) era, should act as a primary tailwind.

Honda Motor Co., Ltd. (NYSE:HMC)’s emphasis on the current profitability of its ICE and HEV segments and preparations for potential competitiveness in the BEV market should continue to support its revenue growth in the near term. Given its focus on electrification, Honda Motor Co., Ltd. (NYSE:HMC) announced a plan to make investments to the tune of ~$65 billion in electrification and software by the fiscal year 2030. The company has doubled from its previous commitment.

This strategic move demonstrates its commitment to transitioning towards electric mobility and further strengthening its competitive edge. Moreover, Honda Motor Co., Ltd. (NYSE:HMC)’s vehicles are of high quality and reliable. This enables increased brand loyalty, which should support its long-term growth trajectory. During the quarterly results for the period ending June 2024, Honda Motor Co., Ltd. (NYSE:HMC) highlighted optimism around its automobile business operations. Apart from the strong sales of hybrid models, the favourable impact of pricing commensurate with improvement in product value, which resulted in increased profits.

As per Insider Monkey’s Q2 2024 database of over 900 hedge funds, 12 hedge funds were long Honda Motor Co., Ltd. (NYSE:HMC).

While we acknowledge the potential of HMC as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than HMC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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