Rising inflation, supply chain bottlenecks, and potential monetary policy tightening in the near term are expected to keep the stock market volatile. Therefore, we think it could be wise to bet on fundamentally sound large-cap stocks CVS Health (NYSE:CVS), Dell Technologies (NYSE:DELL), and Walgreens Boots (WBA), which look undervalued at their current price levels. Let’s discuss.All the three major stock market indexes are on track to close the week higher. A solid start to the third-quarter earnings season has helped the indexes rally lately. According to FactSet, the third-quarter net profit margin for S&P 500 member companies is 12.3% higher than the 10.9% five-year average net profit margin.
However, an increase in the Consumer Price Index, continued supply chain disruptions, and the possibility of the Fed tightening its monetary policy in the near term could keep the market volatile in the near term. Therefore, we think it would be wise to scoop up the shares of fundamentally strong large-cap stocks because large-cap stocks are less sensitive to market volatility than mid-cap or small-cap stocks.
Quality large-cap stocks CVS Health Corporation (CVS), Dell Technologies Inc. (DELL), and Walgreens Boots Alliance, Inc. (NASDAQ:WBA) are currently trading at discounts to their peers. So, it could be wise to bet on these stocks now.