Over 21 months later, here's how /r/investing performed on the underrated stock survey. Inspired by Mr_Suzan and galloog1

[resjudicata]

PSTG
AMSC
DAIO
INOD
QMCO

 

[christian102]

@christianfrend I don’t know if the data accounts for it or not, but pretty sure JNUG underwent a 10:1 reverse split or two in that time period, inflating the actual gain %.

 

[julieann23]

@christianfrend Warren Buffett's real secret: Reddit

 

[elinternational]

@christianfrend Oh hey I'm on this list. I was repping Apple at the time because I DID think it was underrated. For years and even at the time this list was made Apple was trading at a PE multiple in the low teens or single digits.

I think people objectively assumed it had peaked and smartphone sales were declining.. which is true. But as MSFT reformed with cloud computing and subscription models, Apple has reformed with services.

This is not to gloat, I'm wrong about a lot, but I do find this an interesting snapshot into the past. I do believe that one day Apple will be worth 40-50 trillion, but not until far into the future. It just has the most robust moat I've ever seen around a company.

Today it is much more fairly valued than it was just a few years ago however, and it is no longer underrated as it was at the time I made my initial reply to OP.

If I had to call one today I'd actually say Berkshire Hathaway. It's trading at a Market Cap of 475 Billion which is cheap considering its stake in Apple alone is worth over 100 Billion, and it has approximately 135 Billion in cash on hand. It's a steal at $170 and under, which it has been at several points in the last few months.

The reason companies like Berkshire aren't trading at a high multiple is because it's not a sexy high growth tech company, and people are worried about Warren's health. But I think it's in capable hands even after he passes on, and if they retain their stake in Apple among the other great holdings they have it will become immensely more valuable as time moves on.

Fun tidbit, at the time of the writing of this comment Berkshire owns approximately 250 Million shares of Apple. Once the 4-1 stock split goes through on August 24th, they'll own the same amount of equity but now 1 Billion shares of Apple. Pretty insane to think about.

 

[vonabell]

@elinternational Apple is, in my opinion, the best poised to actually bring AR technology to mass consumer adoption. This is in part because of their knack for design, and a large fanbase, even for unconventional things like airpods (remember the memes about how it looks like ... I don't even remember what the meme said they look like now, that's how normal they've become), and in part because they already are in the prototype phase with their glasses (which were leaked in news articles as early as fall 2017). If this works out like the iPhone did, to usher in a new way of consuming digital content, you bet the market cap is going up up up.

 

[joshrbanate]

@vonabell Spoken like a true fanboy I think.

 

[vonabell]

@joshrbanate Is this an ad hominem attack? Hmm

Anyhow, in case you're serious, I'm more of a Microsoft fanboy. The truth is, however, regardless of how useful the Hololens and Mixed Reality might be, its price point and current offerings are more geared toward industrial and professional users. This isn't the road to mass adoption.

 

[jcphan47]

@vonabell This may prove to be true. The AR, LIDAR, ultra wide band, and Spatial Audio technologies that Apple is working on (seemingly independently of each other), will eventually be unified and manifested in some sort of AR/VR product. The building blocks are there, and with Apple’s history of “polish an existing idea to perfection before releasing”, we will probably see a surprisingly robust product be released in the next few years.

 

[resjudicata]

@elinternational Berkshire is supposed to buy a 25% of Bank of America that would maybe raise a price in the next upcoming days. But totally agree with your statement there. It's a company that has a lot of liquidity and positions in growing markets, they also got rid of their airlines positions which I think was a really smart move in the middle term.

I will definitely poor some money in Berkshire as I think it has good prospects in the future. It won't be a Tesla to grow a 500% but I think it's a reliable company that is underpriced.

 

[shawnwes1]

@resjudicata Pretty sure Berkshire is up like 2 million percent since its inception.

 

[resjudicata]

@shawnwes1 Gotta say that really good vibes from today from Berkshire. The opening was quite wild in the sense of grow but I grabbed some stocks and I think it's now in +3$ since the opening.

I still think that's it's a good price to enter and that it will correct itself in the upcoming months. So I'm expecting a steady (but reasonable) grow. They still have a lot of liquidity to keep investing so it might be a smart move in the middle term. Let's see what the upcoming news are but I'm already satisfied with the return for a daily investment.

 

[resjudicata]

@shawnwes1 Although, as you mentioned 2 million up since inception it's a huge percentage, but would you hold those shares for such a long time? Or are you searching for a middle term investment? It's the same than judging Coca Cola's grow since inception, it's quite irrelevant in my opinion as I wasn't there and I'm not gonna hold those shares for such a long time.

 

[aliens]

@elinternational

The reason companies like Berkshire aren't trading at a high multiple is because it's not a sexy high growth tech company, and people are worried about Warren's health.

I guarantee a massive selloff as soon as he passes, though. That's a huge buying opportunity if you believe in his successors (and you probably should, since he's stepped back from primacy for a while now).

 

[samalematina]

@christianfrend So now the question becomes which of those heavily declined stocks should we pick up? Cuz those are the ones I can afford! I’m half serious there too...

In all seriousness, there was obviously a reason they were suggested in the first place. And something or multiple things happened between now and then to make them drop, some by more than half. So really, it would be kinda a cool exercise to focus on those “losers” and see which ones turn to “winners” in another 21 months

 

[charlesfloyd52]

@samalematina Honestly, some of those companies showed trouble before being picked or had very uncertain futures with a high probability of failure. Kraft was already showing cracks, BUD was in trouble due to declining beer consumption, etc.

Investing in these companies was investing in the hopes that management would turn around these poor/declining companies. This is much riskier than investing in a good business in the the first place. Of course, your reward for investing in a beaten up company would be amazing if they succeed, so high risk/reward.

 

[vee78]

@samalematina The obvious choice that sticks out is Disney. I would also love to own Tencent but I'm kind of scared of potential delisting in the future. Micron technology I'm not familiar with tech but hasn't had the run-up as the other chip makers. Live nation if you want to play a potential COVID recovery but I still think its too soon for that. I think Visa is still a buy at this price.