3 Cheap Stocks from a Great Money Manager

I'm Susan jabinski with Morningstar T Rowe Price recently launched a new ETF called T Rowe Price capital appreciation Equity ETF now that's pretty notable because the manager of the new ETF David gero is considered by many including Morningstar to be among the best money managers in the business today plus gero's allocation mutual fund T row price capital appreciation has been closed to new investors since 2014. the new ETF focuses exclusively on stocks Giro is taking a bottom-up approach to investing in U.S companies favoring those with capable management teams and leading Market positions he invests in those whose stocks are trading at attractive relative market valuations and that he expects to provide strong risk-adjusted returns over time so today we're scouring the portfolio of this talented manager's new ETF for investment ideas that look undervalued according to morningstar's metrics the first undervalued stock in gero's portfolio is bechten Dickinson the world's largest manufacturer and distributor of medical surgical products earns a narrow economic moat rating from Morningstar due to the scale of its basic surgical product segment the company received some good news recently as the Food and Drug Administration cleared the company's updated pump infusion system which had received recalls during the past several years although the stock rose on that bit of good news it still looks undervalued by morningstar's measures the second cheap stack that gero likes is fortif fortiv is a technology conglomerate with a broad portfolio of companies that provide Mission critical functions such as gas detection services and radiation exposure measurements its companies serve a wide range of end markets including manufacturing utilities medical and electronics Morningstar assigns forward of a narrow economic moat rating because its businesses have large installed bases with high switching costs we also think management has done an exceptional job of allocating capital in particular driving significant margin expansion in the businesses it acquires the stack looks inexpensive by Morningstar standards the last stack on the list today is remedy remedy is a name in the Diagnostics and research industry that provides instruments tests services and software solutions to the pharmaceutical biomedical chemical environmental and general industrial markets the company has been evolving over the past several years after a series of Acquisitions and now operates two main segments Diagnostics is one and Discovery and analytical Solutions is the other we think the company has carved out a narrow economic moat thanks in part to the switching costs associated with both of its segments we think the stock is undervalued for more stack ideas be sure to subscribe to morningstar's channel and visit morningstar.com

Channel: Morningstar, Inc.

Views: 2,638

Keywords: morningstar, investing, stocks, funds, etfs

Id: 2aLU5GiEaQs

Length: 3min 1sec (181 seconds)

Published: Tue Aug 01 2023