3 Dirt-Cheap Stocks to Buy in a Market That's Priced for Perfection

Market Overview - The S&P 500 Shiller CAPE ratio is near its second-highest level ever, indicating a potentially overvalued market, with the highest mark recorded in early 2000 before the dot-com bubble burst and the next-highest in late 2021, which preceded a more than 20% decline in the index [1] Company Analysis: BioNTech - BioNTech has a current market cap of approximately $27 billion, with a cash stockpile exceeding$16.7 billion and a low debt load of around $244 million, resulting in an enterprise value (EV) of less than$10 billion, suggesting it is undervalued [2] - Despite a decline in COVID-19 vaccine sales, Wall Street projects BioNTech to generate around $2.5 billion in revenue by 2025, leading to an EV-to-sales multiple of only 4x [3] - The company aims to secure regulatory approvals for 10 cancer indications by 2030, which could enhance its attractiveness as an investment [3] Company Analysis: D.R. Horton - D.R. Horton has been the largest homebuilder in the U.S. by volume for 23 years, closing on 93,600 homes in its 2024 fiscal year, capturing nearly 14% market share [4] - The company's price-to-earnings-to-growth (PEG) ratio is 0.55 based on five-year growth projections, indicating a discounted valuation as any PEG below 1.0 is considered a bargain [5] - The U.S. housing market fundamentals suggest a need for an additional 4 million homes, which bodes well for D.R. Horton's growth prospects [6] - D.R. Horton has effectively managed high mortgage rates by offering incentives such as mortgage rate buydowns to customers [7] Company Analysis: Energy Transfer - Energy Transfer operates over 130,000 miles of pipelines, transporting natural gas, natural gas liquids, crude oil, and refined petrochemical products across the U.S. [8] - The company is trading at a forward price-to-earnings ratio of 10.9, which is lower than the S&P 500 energy sector's 14.4, indicating it is undervalued [9] - The potential increase in domestic oil and gas production under a new administration could positively impact Energy Transfer, and its revenue is expected to remain stable due to its "toll-road-like" business model [9] - Energy Transfer offers a forward yield of 6.36%, suggesting that unit price appreciation could lead to solid total returns for investors [10]