3 Best Value Stocks to Buy for 2021
After the doom and gloom of 2020, 2021 has no place to go but up. Along with the human spirit, the stock market is also set for a recovery. So far this year, we have seen the technology sector growth stocks leave everything far behind. Value stocks have also languished behind them. Most value funds have struggled to keep pace with the market. Even Warren Buffet, the world’s most famous practitioner of value investing has struggled to compete with technology’s growth stocks this year. He bought 6.1 million shares of the high priced IPO of Snowflake Inc. he expects his investment in the big data and cloud computing company to grow. If the granddaddy of value investing still believes in its power, who are we to ignore it. Buying stocks of a good business at low prices has always yielded fruitful results for investors in the long run. That is not going to change in 2021 either and investing in the best value stocks is definitely going to be a wise investment move going forward.
Here Are the Best Value Stocks For 2021
QEP Resources, Inc. (QEP)
One of the best value stocks for 2021, QEP Resources, Inc. operates as a crude oil and natural gas exploration and production company in the United States. The company conducts exploration and production activities in the Permian Basin in Western Texas; and Williston Basin in North Dakota. As of December 31, 2019, it had estimated reserves of approximately 382.3 million barrels of oil equivalent. The company sells oil, condensate, gas, and natural gas liquids to refiners, marketers, midstream service providers, wholesale marketers, industrial users, local distribution companies, and utility and other companies. QEP Resources, Inc. was incorporated in 2010 and is headquartered in Denver, Colorado.
Southwestern Energy Company (SWN)
Another one of the best value stocks for 2021, Southwestern Energy Company, an independent energy company, engages in the exploration, development, and production of natural gas, oil, and natural gas liquids (NGLs) in the United States. It operates through Exploration and Production, and Marketing segments. The company focuses on the development of unconventional natural gas reservoirs located in Pennsylvania and West Virginia. As of December 31, 2019, it had approximately 173,994 net acres in Northeast Appalachia; and approximately 287,693 net acres in Southwest Appalachia. The company’s estimated proved natural gas, oil, and NGLs reserves comprise 12,721 billion cubic feet of natural gas equivalent (Bcfe); and 929 Bcfe of proved undeveloped reserves. It also engages in the marketing of natural gas, oil, and NGLs. It serves energy companies, utilities, and industrial purchasers of natural gas. Southwestern Energy Company was founded in 1929 and is headquartered in Spring, Texas.
SM Energy Company (SM)
The third among the best value stocks for 2021, SM Energy Company, an independent energy company, engages in the acquisition, exploration, development, and production of crude oil and condensate, natural gas, and natural gas liquids in the state of Texas. As of December 31, 2019, the company had 462.0 million barrels of oil equivalent of estimated proved reserves; and working interests in 807 gross productive oil wells and 519 gross productive gas wells in the Midland Basin and South Texas. The company was formerly known as St. Mary Land & Exploration Company and changed its name to SM Energy Company in May 2010. SM Energy Company was founded in 1908 and is headquartered in Denver, Colorado.
In an ideal situation, the share price in the stock should be equal to its intrinsic value. In the long run, the price of the stock will be approximately equal to its value, but the same doesn’t exist in the short run for various reasons. The reasons could be macroeconomic disturbances, or the cyclical nature of the sector that the business belongs to. The value investors expect the market to eventually recognize the mispricing and correct it. This is why experienced investors participate by going for fundamentally strong stocks, trading at a low price. Without this reference point, it will be impossible to execute the “buy low, sell high” investment strategy.
In conclusion, while looking for the best value stocks for 2021, investors should also carry out their own research, set realistic financial goals, gauge their risk appetite and treat the “ best value stocks for the year” lists released by the media with discretion. Here’s hoping that 2021 turns out to be a great year for investing.