We face growing worldwide turmoil and worsening economics, and a lot of share prices have been falling. On top of the global slowdown, we’ve also seen a tech stock sell-off. That’s hit some US stocks hard, and UK shares have also felt some pain.
But when life gives us lemons, right? I’m seeing plenty of opportunities for making lemonade out there. And so do the folks at investment platform provider IG. Its writer Piper Terrett has highlighted three undervalued shares that “could be worth buying for the longer term“.
Longer term… I like that. It’s very much in line with our investing approach here at The Motley Fool.
Fallen US giant
One is the US company formerly known as Facebook, Meta (NASDAQ: FB). Meta shares have fallen 36% over the past 12 months. And from a peak in September 2021, they’re down a whopping 48%.
Full-year results in February disappointed investors, sending the stock reeling.
Then there was a whistleblower report revealing that the company had sat on research showing Instagram was damaging teenagers’ mental health. And it hadn’t been too effective in taking down hate speech.
Plus there’s “a more hostile regulatory environment in Europe, which is seeking to rein in the power of the big technology companies through its Digital Markets Act“. But the report reckons Meta “is a behemoth and the present hurdles are not insurmountable for the company“.
The bottom line takeaway for IG? “Although it might take a while for Meta shares to receive a re-rating, the present dip could represent a buying opportunity for investors“.
UK shares #1: ITV
Time for UK shares now, with ITV (LSE: ITV) having fallen 45% in a year.
Full-year results in March led to a big sell-off, despite growing profits. It seems ITV’s plans to invest £1.23bn in its streaming business ITVX proved hard to swallow for some investors. The aim is to follow that with an additional £1.35bn in 2023, for a service not due to be launched until the final quarter this year.
The board thinks ITVX will double digital sales at the company to £750m by 2026. But it is up against the likes of Netflix. And it will be competing with its own conventional offerings too.
After strong a strong Q1 update, what’s the IG verdict? It said: “While the cost of living crisis and inflation could affect input costs and advertising, the share price dip suggests the bad news may already be in the price.”
UK shares #2: NatWest
UK shares again next, in the form of NatWest Group (LSE: NWG). Formerly known as Royal Bank of Scotland, it was a big casualty of the banking crisis in the UK. So what’s the attraction now? Firstly, there’s a dividend yield of 4.8%.
We also have a big share buyback programme, with £750m already returned that way. The bank intends to continue with a further £2bn over this year and next. What’s it all worth? It appears that “analysts say this brings the dividend yield on the shares closer to 13%“.
The IG take on NatWest? At current price levels, “the shares are worth buying for the long-term“.