The relentless dominance of tech giants—the so-called “Magnificent Seven”—has left many solid companies trading at bargain valuations, creating what veteran investor Bill Nygren calls “an unusual opportunity.”
In his recent CNBC interview, the Oakmark Fund portfolio manager highlighted overlooked stocks with single-digit P/E ratios, arguing that the market’s fixation on mega-cap tech has unfairly left strong businesses behind.
“With the market at about 20 times earnings, we’ve got an unusual opportunity to buy companies at single-digit multiples that are just kind of left behind,” Nygren said.
He pointed to Delta Airlines, trading at a P/E under seven, as an example of a business whose earnings potential far outpaces its current valuation. Similarly, Charter Communications—often mislabeled as a legacy video provider—is now primarily an internet company, yet trades at just eight times next year’s expected earnings.
Nygren also highlighted Citigroup, a bank undergoing a major restructuring, priced at 70% of book value and seven times forward earnings.
“If you buy companies like that, they’re already incorporating pretty negative expectations,” he noted. This pessimism, he argues, sets the stage for strong returns for patient investors.
While the market obsesses over high-flying tech stocks, disciplined value investors can still find compelling opportunities in sectors left for dead.
As Nygren puts it, buying these undervalued names today and holding them long-term makes it “unlikely that you don’t come out reasonably well.” In an era of hype-driven investing, that’s a strategy worth remembering.
You can watch the entire interview here:
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