4 discount titles that could make a splash

Morningstar recently identified 4 discount stocks that could prove to be real bargains.
Semiconductors, fundamental to technological innovation, appear today as a surprisingly undervalued sector, with a 15% undervaluation compared to average market values, and identifying undervalued opportunities is often the key to achieving significant profits.
Although these stocks saw a slight sell-off in September, Morningstar remains optimistic about the future of this sector, especially given the growing expansion in the field of artificial intelligence.
4 discount stocks that could make a splash Let's take a detailed look at the 4 discount stocks recommended by Morningstar, analyzing their prospects and the reasons that make them attractive to investors.
1) Infineon Technologies for the automotive of the future Infineon Technologies (Xetra) stands out among the semiconductor stocks that catch Morningstar's attention, thanks to its strong exposure to the automotive sector.
More than 40% of Infineon's revenue comes from this sector, and the German company appears to be strategically positioned to support the development of powertrains for electric vehicles over the next ten years.
According to Morningstar, the company “should be well positioned to support automotive powertrain development over the next decade.” This prospect is fueled by growing interest in electric vehicles and advanced safety technologies, which require a large presence of semiconductors.
With a solid base in the automotive sector and an expectation of growing demand for vehicle chips, Infineon Technologies therefore appears as a fascinating opportunity for investors looking for a discount stock with attractive growth prospects.
Last week UBS analysts confirmed their "buy" rating on the stock with a target price of euros.
The stock is currently trading at around 33 euros on the XETRA stock exchange in Germany.
2) NXP Semiconductors: diversification and opportunities NXP Semiconductors (Nasdaq) is another stock that catches Morningstar's attention, thanks to its well-diversified presence in the automotive sector.
The company derives 50% of its revenue from the automotive end market, and its operations extend into automotive electrification and safety products, including radar and battery management systems.
Morningstar believes NXP's business is well positioned to benefit from increasing chip content per vehicle, with single-digit revenue growth expected over the long term.
Despite short-term concerns about demand, Morningstar believes the market is overlooking NXP's potential in the automotive sector.
Morgan Stanley issued an “Equalweight” rating on NXP Semiconductors with a target price of $215 (down from $227 previously).
The stock listed on the Nasdaq trades at around $203.
3) MediaTek and its smartphone chips MediaTek (TWSE), a Taiwanese manufacturer of chips for mobile devices such as smartphones and tablets, is considered by Morningstar to be a stock at a "strong discount" compared to its fair value.
On the Taiwan stock exchange, the shares are trading at 815 Taiwan dollars, far below the fair value estimate of 1,400 Taiwan dollars.
Despite concerns about declining smartphone chipset market share, Morningstar believes this offers ample entry opportunities, as MediaTek still has plenty of room to expand its product portfolio into mid-range and high-end 5G smartphones.
With the growing adoption of 5G devices, MediaTek could see significant demand for its products and could represent an interesting investment opportunity.
4) Skyworks Solutions: Products for 4G and 5G Skyworks Solutions (Nasdaq) is known for its radio frequency products that have facilitated the adoption of 4G and 5G mobile networks.
According to Morningstar, these products will remain essential as an increasing number of 5G phones enter the market.
This steady demand for radio frequency products could allow Skyworks Solutions to achieve long-term single-digit revenue growth.
As the transition to 5G networks accelerates and mobile connectivity increases, Skyworks Solutions could be a semiconductor stock with significant potential.
Citigroup downgraded shares of Skyworks Solutions from a “neutral” rating to a “sell” rating this week, lowering its price target to $87 (from $116).
The Nasdaq stock is currently worth $97.
However, it should be borne in mind that a recovery in demand for smartphones could surprise the market, leading to a significant increase in the value of the stock.
Therefore, this may be the right time to consider the potential offered by Skyworks Solutions with a counter-current approach.
read also Why the shares of this chip company are worth buying, and in a hurry DISCLAIMER The information and considerations contained in this article should not be used as the sole or main support on which to make investment decisions.
The reader retains full freedom in his own investment choices and full responsibility in making them, since he alone knows his risk propensity and his time horizon.
The information contained in the article is provided for informational purposes only and its disclosure does not constitute and should not be considered an offer or solicitation to public savings.

Author: Hermes A.I.

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