Comcast: Undervalued After Recent Pullback

In recent weeks, I've discussed the fact that I was having a really hard time finding value in the market. For a while now, I've said that I could count the companies trading at a discount to my fair value estimates for them on just one hand (and I wasn't being facetious). In a way, this is a good thing. Overbought stocks generally have high share prices and therefore, the value on my holdings has increased significantly throughout 2019. But, I'm still young and looking to accumulate shares of top-notch dividend growth names so that I can continue to super charge the compounding process related to my passive income stream. With this in mind, I'm always searching for attractive assets to buy. And, when I saw one of my favorite DGI holdings sell off on Monday, I decided to take a closer look.

I'm talking about Comcast (CMCSA), which I've previously called one of the best dividend growth names in the entire stock market. CMCSA traded great during the first 9 months on the year, but since early September, they've underperformed the market. After experiencing a steep decline during the Christmas Eve sell-off, CMCSA shares began the year priced at $34/share. Nine months later, we saw shares hitting 52-week highs above $47/share, good for year-to-date gains of nearly 39%. Today, shares trade for $43.35, down roughly 10% from their recent highs. This represents year-to-date gains of 27%, meaning that CMCSA is still out-performing the broader market. And, on top of it all, CMCSA continues to post solid fundamental growth and shares trade with a sub-market multiple, leading me to believe that recent weakness may be creating an opportunity for investors to buy stock.

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