In this article, I’ll discuss two undervalued growth stocks that I believe are great additions to a portfolio. These investments are low-risk and offer security in their valuation. I currently own both stocks and am considering increasing my positions.
The first stock is Alphabet (NASDAQ:GOOG.L)(NASDAQ:GOOG), a big tech company that I consider to be roughly 20% undervalued based on discounted earnings analysis. Alphabet offers a diverse range of technology products and is a leader in the AI sector. With year-on-year revenue growth of 11.8% and a price-to-earnings ratio of 26.5, I believe Alphabet provides good value for money compared to other tech companies like Microsoft.
The second stock is Games Workshop (LSE:GAW), a niche fantasy entertainment company known for its creative tabletop games. With a loyal customer base and a commitment to long-term success, Games Workshop has shown consistent year-on-year revenue growth of 14.5% and a price-to-earnings ratio of 23.5. I believe the market has undervalued Games Workshop, making it a strong investment opportunity.
While I believe in diversification, my portfolio is concentrated with just 10 stocks. Through an 80/20 analysis, I focus on the top 20% of my investments that produce the best results and continue to increase those positions. Both Alphabet and Games Workshop have proven to be valuable additions to my portfolio, and I have no plans to cut them from my holdings.
It’s important to note that Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. I, Oliver Rodzianko, have positions in Alphabet and Games Workshop Group Plc. The Motley Fool UK has recommended Alphabet, Games Workshop Group Plc, and Microsoft. The views expressed in this article are my own and may differ from the official recommendations of The Motley Fool. At The Motley Fool, we believe that considering a diverse range of insights makes us better investors.