After a sluggish New Year start, the stock market is again rallying. The benchmark S&P 500 and Nasdaq 100 each hit new all-time highs on Jan. 19. The blue-chip Dow Jones Industrial Average has been hitting successive new PRs since December of last year.
The new records have been reached thanks, in large part, to the continued rally in technology stocks. Specifically, the stocks of microchips and semiconductor companies tied to artificial intelligence (AI) have been leading the market higher. While impressive, chip stocks aren’t the only game in town.
Beyond tech, other stocks worth owning, many of which are undervalued and available to buy on the cheap right now. So, let’s delve into three such stocks to buy to start your year off strong.
Restaurant Brands International (QSR)
With the revival of the Burger King chain, Restaurant Brands International (NYSE:QSR) looks promising for 2024. Additionally, the company owns Popeyes, Firehouse Subs and the Tim Hortons coffee and doughnut chain.
Today, Restaurant Brands International is the fifth-largest operator of fast food restaurants worldwide. In recent years, its focus and resources have largely gone to reviving the BK chain that has fallen behind McDonald’s (NYSE:MCD) and other competitors.
Recently, QSR announced that it is taking full control of Carrols Restaurant Group (NASDAQ:TAST). The $1 billion deal is with its largest U.S. Burger King franchisee. Carrols operates more than 1,000 Burger King restaurants and 60 Popeyes locations across America. Currently, Restaurant Brands owns 15% of Carrols and is now taking full control. The company is moving away from larger franchisees, such as Carrols, in favor of local franchisees as part of its turnaround strategy.
Previously, QSR announced its investment of $500 million to remodel 600 of Carrols’ Burger King outlets. The stock has gained 15% in the last year and pays a quarterly dividend of 55 cents a share, giving it a yield of 2.86%.
FedEx (FDX)
Investors shouldn’t give up on shipping and logistics giant FedEx (NYSE:FDX). Company executives haven’t.
FedEx’s new chief financial officer (CFO) John Dietrich has been buying up the company’s stock lately. The share price dropped following the most recent earnings print in December. Dietrich, who became the CFO on Aug. 1 of last year, paid $252,000 on Dec. 28 for 1,000 shares of FDX stock at an average price of $252.02 each.
According to documents filed with the U.S. Securities and Exchange Commission (SEC), Dietrich now owns 4,745 shares of FDX stock worth $1.16 million. Dietrich, previous CEO of private aviation firm Atlas Air Worldwide, began buying FedEx shares after the company reported disappointing earnings on Dec. 19, sending the stock down 12% in a single trading session. The shares have been trading sideways to start 2024. This presents a buying opportunity for investors.
Micron Technology (MU)
Investors looking for a microchip and semiconductor stock to play the artificial intelligence (AI) trade might want to look at Micron Technology (NASDAQ:MU). The stock has been rising along with the entire chip sector, but not as fast as many other semiconductor securities. Year to date (YTD), MU is up 6% and gained 50% in the past 12 months. Compare that to the 26% YTD gain in the stock of Advanced Micro Devices (NASDAQ:AMD), whose share price is now up 150% in the last 12 months.
MU stock has been on an upswing since the company reported earnings right before Christmas that beat Wall Street forecasts. The still unprofitable Micron announced a loss of 95 cents a share for its fiscal first quarter, which was better than a loss of $1.01 that was expected. Revenue totaled $4.73 billion, which topped consensus forecasts of $4.58 billion. Micron is a leader in dynamic random-access memory chips often used in desktop computers and servers, and flash memory found in hard drives.
The company gave a bullish outlook for artificial intelligence (AI), saying on its earnings call that generative AI would drive “multiyear growth” at the company. Additionally, MU said that inventory levels for its memory and storage chips are at normal levels. In fact, it is working with Nvidia (NASDAQ:NVDA) on some upcoming AI chips. All are good reasons to buy MU stock to get a strong start to 2024.
On the date of publication, Joel Baglole held a long position in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.